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    sadi.turaev's Avatar
    sadi.turaev Posts: 1, Reputation: 1
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    #1

    Jan 28, 2011, 01:22 AM
    How to calculate liabilities and equity
    December 31, 2010
    Assets $ 45,000
    Liabilities 23,500

    December 31, 2011
    Assets 48,000
    Liabilities ?

    During year 2011
    Stock issuances 5,000
    Net income (loss) 7500
    Cash dividends 2,500


    1a. What is the amount of equity on December 31, 2010?

    Amount of equity $ 21500

    1b. What is the amount of equity on December 31, 2011?

    Amount of equity $

    1c. What is the amount of liabilities on December 31, 2011?

    Amount of liabilities $
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
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    #2

    Jan 28, 2011, 09:21 AM

    For 1b you know your beginning equity at 1 Jan 2011, which is the same as 31 Dec 2010. Now you need to add your stock issuances during 2011, add your net income for 2011, then subtract your dividends for 2011, which will equal your ending equity at 31 Dec 2011.

    For 1c subtract your ending equity that you calculated in 1b from your assets at 31 Dec 2011 to get your ending liabilities for 31 Dec 2011.
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