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Math  /  Algebra

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Answer the following questions. Hint. Use the accounting equation. a. At the beginning of the year, Addison Company's assets are $300,000\$ 300,000 and its equity is $100,000\$ 100,000. During the year, assets increase $80,000\$ 80,000 and liabilities increase $50,000\$ 50,000. What is the equity at year-end? b. Office Store Company has assets equal to $123,000\$ 123,000 and liabilities equal to $47,000\$ 47,000 at year-end. What is the equity for Office Store Company at year-end? c. At the beginning of the year, Quaker Company's liabilities equal $70,000\$ 70,000. During the year, assets increase by $60,000\$ 60,000, and at year-end assets equal $190,000\$ 190,000. Liabilities decrease $5,000\$ 5,000 during the year. What are the beginning and ending amounts of equity?
Complete this question by entering your answers in the tabs below. Required A Required B Required C
At the beginning of the year, Addison Company's assets are $300,000\$ 300,000 and its equity is $10\$ 10 I increase $80,000\$ 80,000 and liabilities increase $50,000\$ 50,000. What is the equity at year-end? \begin{tabular}{|c|c|c|c|c|c|c|} \hline & Assets & == & Liabilities + & + & \multicolumn{2}{|l|}{ Equity } \\ \hline Beginning & $300,000=\$ 300,000= & == & & + & \ & 100,000 \\ \hline Change & 80,000= & = & 50,000+ & + & & \\ \hline Ending & & =$ & + & + & & \\ \hline \end{tabular} Bequired A Required B

Studdy Solution

STEP 1

1. We will use the accounting equation: Assets = Liabilities + Equity.
2. All monetary values are in dollars.

STEP 2

1. Determine the year-end equity for Addison Company.
2. Calculate the equity for Office Store Company at year-end.
3. Find the beginning and ending amounts of equity for Quaker Company.

STEP 3

Given: - Beginning assets: 300,000300,000 - Beginning equity: 100,000100,000 - Increase in assets: 80,00080,000 - Increase in liabilities: 50,00050,000
First, calculate the beginning liabilities using the accounting equation: Assets=Liabilities+Equity \text{Assets} = \text{Liabilities} + \text{Equity} 300,000=Liabilities+100,000 300,000 = \text{Liabilities} + 100,000 Liabilities=300,000−100,000=200,000 \text{Liabilities} = 300,000 - 100,000 = 200,000

STEP 4

Calculate the year-end assets: Year-end assets=300,000+80,000=380,000 \text{Year-end assets} = 300,000 + 80,000 = 380,000

STEP 5

Calculate the year-end liabilities: Year-end liabilities=200,000+50,000=250,000 \text{Year-end liabilities} = 200,000 + 50,000 = 250,000

STEP 6

Using the accounting equation to find the year-end equity: 380,000=250,000+Equity 380,000 = 250,000 + \text{Equity} Equity=380,000−250,000=130,000 \text{Equity} = 380,000 - 250,000 = 130,000

STEP 7

Given: - Assets: 123,000123,000 - Liabilities: 47,00047,000
Using the accounting equation: Equity=Assets−Liabilities \text{Equity} = \text{Assets} - \text{Liabilities} Equity=123,000−47,000=76,000 \text{Equity} = 123,000 - 47,000 = 76,000

STEP 8

Given: - Beginning liabilities: 70,00070,000 - Increase in assets: 60,00060,000 - Year-end assets: 190,000190,000 - Decrease in liabilities: 5,0005,000
First, calculate the beginning assets using the accounting equation: Assets=Liabilities+Equity \text{Assets} = \text{Liabilities} + \text{Equity} Beginning assets=70,000+Equity \text{Beginning assets} = 70,000 + \text{Equity}
Since we know the assets increase and the year-end assets: Beginning assets+60,000=190,000 \text{Beginning assets} + 60,000 = 190,000 Beginning assets=190,000−60,000=130,000 \text{Beginning assets} = 190,000 - 60,000 = 130,000

STEP 9

Using the initial assets to find the beginning equity: 130,000=70,000+Equity 130,000 = 70,000 + \text{Equity} Equity=130,000−70,000=60,000 \text{Equity} = 130,000 - 70,000 = 60,000

STEP 10

Calculate the year-end liabilities: Year-end liabilities=70,000−5,000=65,000 \text{Year-end liabilities} = 70,000 - 5,000 = 65,000

STEP 11

Using the accounting equation to find the year-end equity: 190,000=65,000+Equity 190,000 = 65,000 + \text{Equity} Equity=190,000−65,000=125,000 \text{Equity} = 190,000 - 65,000 = 125,000
_SOLUTION_: a. Addison Company's equity at year-end is 130,000130,000. b. Office Store Company's equity at year-end is 76,00076,000. c. Quaker Company's beginning equity is 60,00060,000 and year-end equity is 125,000125,000.

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