Question

Any Rasmussen is the owner and operator of G044, a motivational consulting business. At the end of its accounting period, December 31, 2018, G044 has assets of 633,790 and liabilities of 200,280. Using the accounts he equation and considering each case independently, determine the following amounts.

a. Annie Rasmussen, capital, as of December 31,

2018_________

b. Annie Rasmussen, capital, as of December 31, 2019, assuming that as it is increased by 100,140 and liabilities increased by 60,210 during 2019 _______

c. Annie Rasmussen, capital, as of December 31, 2019, assuming that assets decreased by 50,070 and liabilities increased by 17,750 during 2019 __________

d. Annie Rasmussen, capital, as of December 31, 2019, assuming that assets increased by 83,660 and liabilities decreased by 31,690 during 2019__________

e. Net income (or net loss) During 2019, assuming that as of December 31, 2019, assets were 798,580, liabilities were 129,930, and there were no additional investments or withdrawals ______________

Answer 1

Accounting Equation,

Assets = Liabilities + Capital

a)
Assets = Liabilities + Capital
633,790 = 200,280 + Capital
633,790 - 200,280 = Capital
433510 = Capital
Capital, as of December 31, 2018 = $ 433,510

b)
Assets = Liabilities + Capital
(633,790+100,140) = (200,280+60,210) + Capital
733930 = 260490 + Capital
733930 - 260490 = Capital
473440 = Capital
Capital, as of December 31, 2019 = $ 473,440

c)
Assets = Liabilities + Capital
(633,790 - 50,070) = (200,280 + 17,750 ) + Capital
583720 = 218030 + Capital
583720 - 218030 = Capital
365,690 = Capital
Capital, as of December 31, 2019 = $365,690

d)
Assets = Liabilities + Capital
(633,790+83,660) = (200,280 - 31,690) + Capital
717450 = 168590 + Capital
717450 - 168590 = Capital
548860 = Capital
Capital, as of December 31, 2019 = $ 548,860

e)
Assets = Liabilities + Capital
798,580 = 129,930 + Capital
798,580 - 129,930 = Capital
668650 = Capital

Capital, as of December 31, 2019 = $ 668650
Capital, as of December 31, 2018 = $ 433,510

Increase in Capital = 668650-433510 = 235140

As, no additional investments or withdrawals

Thus, Increase in Capital = Net Income = $ 235,140