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  • Jun 7, 2012, 08:47 AM
    Acescrabble
    Accounting Problem
    Please help to solve accounting problem:

    Beginning Equity Balance:__________________
    Assets during year: 80,000
    Liability beginning of year: 60,000
    Assets at end of year: 180,000
    Liability during year: 10,000
    Ending Equity Balance: 130,000


    O.E./ O.E./
    Assets =Liabilities Capital WithDrawals Revenue Expenses

    80,000
    60,000
    10,000

    My guess below:
    -------------------------------------------------------------------------------------------------------
    180,000 50,000 130,000

    100,000 is beginning balance for Assets
  • Jun 7, 2012, 09:32 AM
    pready
    The accounting equation is:
    Assets = Liabilities + Owners Equity
    To Find Owners Equity just rearrange the equation to:
    Owners Equity = Assets - Liabilities

    Since you are trying to solve for beginning Owners Equity you need beginning Assets and beginning Liabilities.

    Beginning Assets = Ending Assets - Assets during the year (purchased)

    Beginning Liabilities is given to you.
    So:
    Beginning Owners Equity = 180,000 -80,000 - 60,000

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