Question

For Tania08:
At the beginning of the year, Quasar Company's liabilities equal $51,000. During the year, assets increase by $60,000, and at year-end assets equal $190,000. Liabilities decrease $12,000 during the year. What are the beginning and ending amounts of equity?

Answer 1

I'm here now.

Answer 2

Again, start with

Assets = Liabilities + Equity
BOY* _________ $51,000 _________
Change $60,000 ($12,000) _________
EOY** $190,000 _________ _________


*BOY = Beginning of Year
**EOY = End of Year

Now, fill in the gaps in this table.

Answer 3

I'm lost. :/

Answer 4

Assets = Liabilities + Equity.

Agreed on that?

Answer 5

Yes, I get that part.

Answer 6

Good. Next, you're given four pieces of information:
- liabilities at beginning of year: $51,000
- change in assets during year: $60,000
- assets at end of year: $190,000
- change in liabilities during year: ($12,000) .... where as usual ( ) around a number means negative

So what I've done is create a table to show that information. That's what this is:


Assets = Liabilities + Equity
BOY* _________ $51,000 _________
Change $60,000 ($12,000) _________
EOY** $190,000 _________ _________

Answer 7

talk to me ... tell me what's working and what's not

Answer 8

talk to me or I'm out of here.

Answer 9

Ok umm

Answer 10

So given this information:

Assets = Liabilities + Equity
BOY* _________ $51,000 _________
Change $60,000 ($12,000) _________
EOY** $190,000 _________ _________

What are the assets at the beginning of the year, BOY?

Answer 11

You know what the assets are at the end of the year (EOY), and you know how much they changed. Hence what were they at the BOY?

Answer 12

Let X = assets at the beginning of the year.

X + $60,000 = $190,000

Hence what is X?

Answer 13

X must be $130,000. If you end the year with $190,000 of assets, and during the year the assets changed by $60,000, it must be that we started the year with $130,000 of assets.

Hence our table now looks like this:

Assets = Liabilities + Equity
BOY* $130,000 $51,000 _________
Change $60,000 ($12,000) _________
EOY** $190,000 _________ _________

Now, given that, you can calculate the equity at the beginning of the year, one of the two things the question originally asked you for.

In fact, you should really have no trouble filling in every blank in this table.

Answer 14

Can you just tell me what I have to add and subtract?

Answer 15

Well, Assets = Liabilities + Equity

Hence what is Equity on this line:

Assets = Liabilities + Equity
BOY* $130,000 $51,000 _________

Answer 16

I need two answers though.

Answer 17

I know ... and this is how you get there.

Answer 18

Figure out how to complete the table. Think it through and be logical. Complete each row in turn. It's really not hard to figure out what to subtract and what to add.

Answer 19

For example, with the first row, we have


Assets = Liabilities + Equity
BOY* $130,000 = $51,000 + ______

What value of Equity makes sense here?

Answer 20

Is the answer of equity $79.000?

Answer 21

How did you get that?

Answer 22

Sorry, I´ve answered just the inicital equity. It follows the right answers: initial equity = 79.000,00 and the final equity = 127.000,00. You have the following data: initial liabiliaties (IL), the asset´s variation (VA), the final asset (FA) and the liabilities variation (VL). So, Initial asset (IA)= FA - VA = 190.000-60.000 = 130.000. Inital equity = IA- IL = 130.000-51.000 = 79.000. Using the same reasoning, you will get the final equity, because the final liabilities (FL) = IL+VL = 51000+12000 = 63.000. The final equity = FA-FL = 190.0000-63.000 = 127.000. Did you realize that the equity´s variation is equal to asset´s variation minus liabilities variation, i.e, 48.000? You got?

Answer 23

SO its 127000?

Answer 24

There was two questions: the value of equity at the beggining and at the end. At the beggining the answer is 79.000, and at the end the answer is 127.000.

Answer 25

127000 is wrong. =/

Answer 26

Ok. The problem was that the liabilities " decreased"...