At the beginning of the year, Addison Company's assets are $259,000 and its equity is $194,250. During the year, assets increase $80,000 and liabilities increase $52,643. What is the equity at the end of the year?

First you have to calculate the beginning year liabilities by sutracting beginning year Equity from beginning year Assets, then increase Assets and Liabilities by the amount stated to get the ending year Assets and Liabilities.

Then you subtract ending year Liabilities from ending year Assets to get ending year Equity.

In other words, do you know your accounting equation? That's what they're trying to find out with the problem.