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27 July, 16:12

c. At the beginning of the year, Quaker Company's liabilities equal $41,000. During the year, assets increase by $60,000, and at year-end assets equal $190,000. Liabilities decrease $7,000 during the year. What are the beginning and ending amounts of equity

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  1. 27 July, 20:07
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    Beginning Equity = $89,000

    Ending Equity = $156,000

    Explanation:

    Data provided in the question:

    Beginning liabilities = $41,000

    Increase in assets = $60,000

    Ending assets = $190,000

    Decrease in liabilities = $7,000

    Now,

    Beginning Assets = Ending assets - Increase in assets

    = $190,000 - $60,000

    = $130,000

    Ending liabilities = Beginning liabilities - Decrease in liabilities

    = $41,000 - $7,000

    = $34,000

    Also,

    Assets = Equity + Liabilities

    Therefore,

    Beginning Assets = Beginning Equity + Beginning Liabilities

    $130,000 = Beginning Equity + $41,000

    or

    Beginning Equity = $130,000 - $41,000

    = $89,000

    Ending Assets = Ending Equity + Ending Liabilities

    $190,000 = Ending Equity + $34,000

    or

    Ending Equity = $190,000 - $34,000

    = $156,000
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