Question

SOLVING THE ACCOUNTING EQUATION - 10 POINTS State the Accounting Equation and use as a guide to complete the problems below: Solve for the missing value REQUIRED: USE THE EXPLANATIONS PROVIDED TO SHOW THE ACCOUNTING EQUATION AT THE BEGINNING OF THE YEAR, CHANGES DURING THE YEAR, AND THE ENDING BALANCES. THERE WILL BE 9 AMOUNTS TO COMPLETE FOR EACH DESCRIPTION At the beginning of the year, Always Balance Inc has liabilities equal $150,000. During the year, assets increase by $90,000 and equal $340,000 at the end of the year. Liabilities increase $40,000 during the year. If it } At the beginning of the year, Lovin' SOCAL Inc assets are $300,000 and its equity is $100,000. During the year, assets decrease $20,000 and liabilities decrease by $5,000. } } Financial S125,000 in the year. Financial Matters Company, began the year with $125,000 in liabilites and equity combined. During the year, assets increased $75,000 and liabilities increased $70,000. At year-end, the owner's claim on assets was $62,500. Page 15

Answer 1

1. Accounting equation Assets=Liability +equity
2. Given

Asset is 188,000= Liability? +equity is 132,000

Liability = Asset -Equity

              =188000-132,000

              =56000

	Assets	=	Liability	+	Equity
3	250,000	=	150,000	+	100,000	Beg of the year
	90,000	=	40,000		50,000	Change during the year
	340,000	=	190,000		150,000	End of the year
4	300,000	=	200,000	+	100,000	Beg of the year
	-20,000	=	-5000	+	-15000	Change during the year
	280,000		195,000	+	85,000	End of the year
5	182,500	=	125,000	+	62,500	Beg of the year
	75,000	=	70,000	+	5000	during the year
	257,500	=	195,000	+	62,500	End of the year

Note :Given values are marked in Bold in the table and Always Assets will be equal to liability plus equity