Determining Balances Using the Accounting Equation
assets of $550,000 and total liabilities of $210,000. Answer the following
questions viewing each situation as being independent of the others.
(1) If total
assets increased $200,000 during the year, and total liabilities decreased
$75,000, what is the amount of owner’s equity at the end of the year?
(2) During the
year, total liabilities increased $230,000 and owner’s equity decreased
$90,000. What is the amount of total assets at the end of the year?
(3) If total
assets decreased $40,000 and owner’s equity increased $130,000 during the year,
what is the amount of total liabilities at the end of the year?
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