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 Glenda1123 Posts: 2, Reputation: 1 New Member #1 Aug 6, 2007, 04:21 PM
Assets and Liabilities
The question is What is the amount of equity on December 31 and what is the amount of liabilities on December 31

Diagram

December 31
Assets... 58,000
Liabilites..

During the Year
Owner investments... 6,000
Net Income... 8,500
Owner Case Withdrawals... 3,500

I have to find the equity and the liabilites and I am not for sure how to go about doing that could some one help and explain the steps thanks
 CaptainForest Posts: 3,645, Reputation: 393 Ultra Member #2 Aug 8, 2007, 01:38 PM
Assets = Liabilities + Owner's Equity

Therefore since ending Assets are 58,000, we know that Liabilities + Owner's Equity must total 58,000

If the owner has invested 6,000, Plus a Net Income of 8,600, Less what he took out of 3,500…………Then Owner's Equity is:

Owner's Equity = 6,000 + 8,600 – 3,500 = 11,100

Therefore, Liabilities must be 58,000 – 11,100 = 46,900

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