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    blank 1's Avatar
    blank 1 Posts: 3, Reputation: 1
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    #1

    Sep 6, 2012, 04:24 PM
    Financial Statement
    December 31, 2010
    Assets... 123,000
    Liabilities..

    December 21,2011
    Assets... 112,500
    Liabilities... 75,000

    During year 2011
    Owner Investments... 4,500
    Net income (loss)... 18,000
    Owner cash withdrawals.9,000

    I have to calculate the amount of liabilities on December 31, 2010
    paraclete's Avatar
    paraclete Posts: 2,706, Reputation: 173
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    #2

    Sep 6, 2012, 04:32 PM
    questions like this have been answered many times. Assets - Liabilities = Equity. Equity is like inventory; opening plus/minus transactions = closing
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    blank 1 Posts: 3, Reputation: 1
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    #3

    Sep 6, 2012, 05:27 PM
    I still don't understand. I know the equation assets-liabilities= equity. But I don't know how to do it with just the asset.
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    #4

    Sep 6, 2012, 05:48 PM
    I am still confused on how you calculate the liabilities for the previous year even though I know the equation, it is not working out. I believe 2011 equity = 105,000. Then the investments plus net income minus withdrawals = 13,500. If you take 105,000-13,500 you get 91,500. My computer says this is not the right answer. What am I doing wrong?
    paraclete's Avatar
    paraclete Posts: 2,706, Reputation: 173
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    #5

    Sep 6, 2012, 08:24 PM
    Don't know where you got your numbers, You just count back

    equity 2011 112500-75000=37500
    Movement in equity +4,500-18,000-9,000=-22500
    equity 2010 37500+22500 = 60000
    assets 123000 -?????????????= equity 60000

    get a new calculator
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