At the beginning of the year, Addison Company's assets are $243,000 and its equity is $182,250. During the year, assets increase $80,000 and liabilities increase $44,000. What is the equity at the end of the year?
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At the beginning of the year, Addison Company's assets are $243,000 and its equity is $182,250. During the year, assets increase $80,000 and liabilities increase $44,000. What is the equity at the end of the year?
You have to know the account equation:
Assets=Liabilities+Shareholders' Equity
You need to calculate your ending Assets and Liabilities, then use the equation to figure out the ending Equity.
Shareholders' Equity=Assets-Liabilities
I am wondering if you or any body kno's the answer to this problem because I want to chack and see if I got it right.
Be glad to... what did you get? Post your answer, and we can tell you if you're on track or not.
97,000 I don't think that's right though
Nope, give it another go. All you need is right there in Pready's first post:
Assets = Liabilities + Equity
The problem gives you two of the three ingredients for the beginning of the year--then you find the third.
Then use that same equation again for the end of the year, after figuring in the changes to assets and liabilities that you're given.
It helps if you also show your work, not just your answer. That way we can see where you are going wrong.
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