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    Glenda1123's Avatar
    Glenda1123 Posts: 2, Reputation: 1
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    #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's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #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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