Question

In: Accounting

Fritz evans is the owner and operator of Be The One , a motivational consulting business.

Fritz evans is the owner and operator of Be The One , a motivational consulting business. At the end of its accounting period, December 31,2018,Be The One has assets of $3,95,000 and liabilities of $97,000.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 decreased by $65,000 and liabilties increased by $36,000 during 2019

Solutions

Expert Solution

Calculation of total assets

Total assets = $3,95,000 - $65,000

                   = $3,30,000

Calculation of total liabities

Total liabilities = $97,000 + $36,000

                        = $1,33,000

Calculation of owner's equity using accounting equation

Assets  = Liabilities + Owner's Equity

$3,30,000 = $1,33,000 + Owner's Equity

Owner's Equity = $3,30,000 - $1,33,000

                         = $1,97,000

 

 

 


Owner's Equity as of December 31,2019 using accounting equation is $,197,000

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