Fritz Evans is the owner and operator of Be-The-One, a motivational consulting business.

At the end of its accounting period, December 31, 2013, Be-The-One has assets of $395,000

and liabilities of $97,000. Using the accounting equation, determine the following amounts:

a. Owner's equity as of December 31, 2013.

b. Owner's equity as of December 31, 2014, assuming that assets decreased by $65,000

and liabilities increased by $36,000 during 2014.

PE

Question

Darius Ashley

Business

1 September, 22:54

Fritz Evans is the owner and operator of Be-The-One, a motivational consulting business.

At the end of its accounting period, December 31, 2013, Be-The-One has assets of $395,000

and liabilities of $97,000. Using the accounting equation, determine the following amounts:

a. Owner's equity as of December 31, 2013.

b. Owner's equity as of December 31, 2014, assuming that assets decreased by $65,000

and liabilities increased by $36,000 during 2014.

PE

+5

Answers (1)

Know the Answer?

Randy Kane · Answer 1

2013 Equity: 298,000

2014 Equity: 327,000

Explanation:

(A)

Assets = Liabilities + Equity

395,000 = 97,000 + Equity

395,000 - 97,000 = Equity

298,000 = Equity

(B)

if asset increase by 65,000

and liabilities increase by 36,000

(395,000 + 65,000) = (97,000 + 36,000) + Equity

460,000 = 133,000 + Equity

Equity = 460,000 - 133,000 = 327,000