Solved on Feb 04, 2024

Calculate the total liabilities of White Cleaning Services on $31/12/2022$ given that total assets on $31/12/2022$ were $\$ 126,000$ , total assets on $1/1/2022$ were $\$ 85,000$ , total liabilities on $1/1/2022$ were $\$ 17,000$ , total revenue in 2022 was $\$ 61,000$ , total expenses in 2022 were $\$ 35,000$ , and Mr. Mansoor made an additional investment of $\$ 12,000$ to the business in 2022.
Response: 29000

STEP 1

Assumptions
1. Initial total assets on 1/1/2022 are $\$85,000$ .
2. Initial total liabilities on 1/1/2022 are $\$17,000$ .
3. Total revenue for the year 2022 is $\$61,000$ .
4. Total expenses for the year 2022 are $\$35,000$ .
5. Additional investment by Mr. Mansoor in the year 2022 is $\$12,000$ .
6. Final total assets on 31/12/2022 are $\$126,000$ .
7. We need to calculate the total liabilities on 31/12/2022.

STEP 2

First, we need to calculate the owner's equity at the beginning of the year by subtracting the initial total liabilities from the initial total assets.
$Owner's\, Equity_{beginning} = Initial\, Total\, Assets - Initial\, Total\, Liabilities$

STEP 3

Now, plug in the given values for the initial total assets and initial total liabilities to calculate the owner's equity at the beginning of the year.
$Owner's\, Equity_{beginning} = \$85,000 - \$17,000$

STEP 4

Calculate the owner's equity at the beginning of the year.
$Owner's\, Equity_{beginning} = \$85,000 - \$17,000 = \$68,000$

STEP 5

Next, we need to calculate the net income for the year by subtracting the total expenses from the total revenue.
$Net\, Income = Total\, Revenue - Total\, Expenses$

STEP 6

Plug in the values for the total revenue and total expenses to calculate the net income.
$Net\, Income = \$61,000 - \$35,000$

STEP 7

Calculate the net income.
$Net\, Income = \$61,000 - \$35,000 = \$26,000$

STEP 8

Now, we need to calculate the owner's equity at the end of the year by adding the net income and additional investment to the owner's equity at the beginning of the year.
$Owner's\, Equity_{end} = Owner's\, Equity_{beginning} + Net\, Income + Additional\, Investment$

STEP 9

Plug in the values for the owner's equity at the beginning of the year, net income, and additional investment to calculate the owner's equity at the end of the year.
$Owner's\, Equity_{end} = \$68,000 + \$26,000 + \$12,000$

STEP 10

Calculate the owner's equity at the end of the year.
$Owner's\, Equity_{end} = \$68,000 + \$26,000 + \$12,000 = \$106,000$

STEP 11

Finally, we need to calculate the total liabilities at the end of the year by subtracting the owner's equity at the end of the year from the final total assets.
$Total\, Liabilities_{end} = Final\, Total\, Assets - Owner's\, Equity_{end}$

STEP 12

Plug in the values for the final total assets and the owner's equity at the end of the year to calculate the total liabilities at the end of the year.
$Total\, Liabilities_{end} = \$126,000 - \$106,000$

STEP 13

Calculate the total liabilities at the end of the year.
$Total\, Liabilities_{end} = \$126,000 - \$106,000 = \$20,000$
The total liabilities on 31/12/2022 are 20000.

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STEP 1

STEP 2

First, we need to calculate the owner's equity at the beginning of the year by subtracting the initial total liabilities from the initial total assets.
$Owner's\, Equity_{beginning} = Initial\, Total\, Assets - Initial\, Total\, Liabilities$

STEP 3

Now, plug in the given values for the initial total assets and initial total liabilities to calculate the owner's equity at the beginning of the year.
$Owner's\, Equity_{beginning} = \$85,000 - \$17,000$

STEP 4

Calculate the owner's equity at the beginning of the year.
$Owner's\, Equity_{beginning} = \$85,000 - \$17,000 = \$68,000$

STEP 5

Next, we need to calculate the net income for the year by subtracting the total expenses from the total revenue.
$Net\, Income = Total\, Revenue - Total\, Expenses$

STEP 6

Plug in the values for the total revenue and total expenses to calculate the net income.
$Net\, Income = \$61,000 - \$35,000$

STEP 7

Calculate the net income.
$Net\, Income = \$61,000 - \$35,000 = \$26,000$

STEP 8

Now, we need to calculate the owner's equity at the end of the year by adding the net income and additional investment to the owner's equity at the beginning of the year.
$Owner's\, Equity_{end} = Owner's\, Equity_{beginning} + Net\, Income + Additional\, Investment$

STEP 9

Plug in the values for the owner's equity at the beginning of the year, net income, and additional investment to calculate the owner's equity at the end of the year.
$Owner's\, Equity_{end} = \$68,000 + \$26,000 + \$12,000$

STEP 10

Calculate the owner's equity at the end of the year.
$Owner's\, Equity_{end} = \$68,000 + \$26,000 + \$12,000 = \$106,000$

STEP 11

Finally, we need to calculate the total liabilities at the end of the year by subtracting the owner's equity at the end of the year from the final total assets.
$Total\, Liabilities_{end} = Final\, Total\, Assets - Owner's\, Equity_{end}$

STEP 12

Plug in the values for the final total assets and the owner's equity at the end of the year to calculate the total liabilities at the end of the year.
$Total\, Liabilities_{end} = \$126,000 - \$106,000$

STEP 13

Calculate the total liabilities at the end of the year.
$Total\, Liabilities_{end} = \$126,000 - \$106,000 = \$20,000$
The total liabilities on 31/12/2022 are 20000.

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STEP 1

STEP 2

STEP 3

Now, plug in the given values for the initial total assets and initial total liabilities to calculate the owner's equity at the beginning of the year.Owner′s Equitybeginning=$85,000−$17,000Owner's\, Equity_{beginning} = \$85,000 - \$17,000Owner′sEquitybeginning​=$85,000−$17,000

STEP 4

Calculate the owner's equity at the beginning of the year.Owner′s Equitybeginning=$85,000−$17,000=$68,000Owner's\, Equity_{beginning} = \$85,000 - \$17,000 = \$68,000Owner′sEquitybeginning​=$85,000−$17,000=$68,000

STEP 5

Next, we need to calculate the net income for the year by subtracting the total expenses from the total revenue.Net Income=Total Revenue−Total ExpensesNet\, Income = Total\, Revenue - Total\, ExpensesNetIncome=TotalRevenue−TotalExpenses

STEP 6

Plug in the values for the total revenue and total expenses to calculate the net income.Net Income=$61,000−$35,000Net\, Income = \$61,000 - \$35,000NetIncome=$61,000−$35,000

STEP 7

Calculate the net income.Net Income=$61,000−$35,000=$26,000Net\, Income = \$61,000 - \$35,000 = \$26,000NetIncome=$61,000−$35,000=$26,000

STEP 8

STEP 9

STEP 10

Calculate the owner's equity at the end of the year.Owner′s Equityend=$68,000+$26,000+$12,000=$106,000Owner's\, Equity_{end} = \$68,000 + \$26,000 + \$12,000 = \$106,000Owner′sEquityend​=$68,000+$26,000+$12,000=$106,000

STEP 11

STEP 12

Plug in the values for the final total assets and the owner's equity at the end of the year to calculate the total liabilities at the end of the year.Total Liabilitiesend=$126,000−$106,000Total\, Liabilities_{end} = \$126,000 - \$106,000TotalLiabilitiesend​=$126,000−$106,000

STEP 13

Calculate the total liabilities at the end of the year.Total Liabilitiesend=$126,000−$106,000=$20,000Total\, Liabilities_{end} = \$126,000 - \$106,000 = \$20,000TotalLiabilitiesend​=$126,000−$106,000=$20,000The total liabilities on 31/12/2022 are 20000.

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Now, plug in the given values for the initial total assets and initial total liabilities to calculate the owner's equity at the beginning of the year.
$Owner's\, Equity_{beginning} = \$85,000 - \$17,000$

Calculate the owner's equity at the beginning of the year.
$Owner's\, Equity_{beginning} = \$85,000 - \$17,000 = \$68,000$

Next, we need to calculate the net income for the year by subtracting the total expenses from the total revenue.
$Net\, Income = Total\, Revenue - Total\, Expenses$

Plug in the values for the total revenue and total expenses to calculate the net income.
$Net\, Income = \$61,000 - \$35,000$

Calculate the net income.
$Net\, Income = \$61,000 - \$35,000 = \$26,000$

Calculate the owner's equity at the end of the year.
$Owner's\, Equity_{end} = \$68,000 + \$26,000 + \$12,000 = \$106,000$

Plug in the values for the final total assets and the owner's equity at the end of the year to calculate the total liabilities at the end of the year.
$Total\, Liabilities_{end} = \$126,000 - \$106,000$

Calculate the total liabilities at the end of the year.
$Total\, Liabilities_{end} = \$126,000 - \$106,000 = \$20,000$
The total liabilities on 31/12/2022 are 20000.