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27 March, 17:49

Ginger Enterprises began the year with total assets of $500,000 and total liabilities of $250,000.

Using this information and the accounting equation, answer each of the following independent questions.

1. What was the amount of Ginger's owners' equity at the beginning of the year?

2. If Ginger's total assets increased by $100,000 and its total liabilities increased by $77,000 during the year, what was the amount of Ginger's owners' equity at the end of the year?

3. If Ginger's total liabilities increased by $33,000 and its owners' equity decreased by $58,000 during the year, what was the amount of its total assets at the end of the year?

4. If Ginger's total assets doubled to $1,000,000 and its owners' equity remained the same during the year, what was the amount of its total liabilities at the end of the year?

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Answers (1)
  1. 27 March, 18:04
    0
    1. $250,000

    2. $273,000

    3. $455,000

    4. $750,000

    Explanation:

    We know that

    Accounting equation is

    Total assets = Total liabilities + Shareholder equity

    1. The equity would be

    = $500,000 - $250,000

    = $250,000

    2. The equity would be

    Total assets = $500,000 + $100,000 = $600,000

    Total liabilities = $250,000 + $77,000 = $327,000

    So, the equity is

    = $600,000 - $327,000

    = $273,000

    3. Total assets

    Total liabilities = $250,000 + $33,000 = $263,000

    Owner equity = $250,000 - $58,000

    = $192,000

    So, the total assets is

    = $263,000 + $192,000

    = $455,000

    4. Total liabilities equal to

    = $1,000,000 - $250,000

    = $750,000
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