Question

In: Accounting

Terry Fleming is the owner and operator of Go For It LLC, a motivational consulting business.

Terry Fleming is the owner and operator of Go For It LLC, a motivational consulting business. At the end of its accounting period, December 31,2018,Go For It has assets of $6,75,000 and liabilities of $2,15,000.using the accounting equation,Determine the following amounts:

(a)Owner's Equity as of december 31,2018

(b)Owner's equity as of december 31,2019,assuming the assets increased by $1,12,300 and liabilities increased by $32,000 during 2019

 

Solutions

Expert Solution

Calculation of Total assets & Total Liabilities

Total assets  = $6,75,000 +$1,12,300

                    = $7,87,000

Total liabities = $2,15,000 + $32,000

                      = $2,47,000

Calculation of Owner's Equity using accounting equation

 

Assets = Liabilities + Owner's Equity

$7,87,000 = $2,47,000 + Owner's Equity

Owner's Equity =$7,87,000 - $2,47,0000

                         =$5,40,300

 


Owners's Equity as of December 31,2019,using accounting equation is $5,40,300

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