The summaries of balance sheet and income statement data follow.

Beginning of year:

Total assets $ 85,000

Total liabilities 62,000

Total owner's equity?

End of year:

Total assets 110,000

Total liabilities?

Total owner's equity 60,000

Changes during year in owner's equity:

Investments by owner?

Drawings 18,000

Total revenues 175,000

Total expenses 140,000

Required: Calculate the missing items above.

Total owner's equity = $23,000

Total liabilities = $50,000

Investment by owner = $20,000

Explanation:

We use the accounting equation which is presented below:

Total assets = Total liabilities + owners equity

At the beginning of the year

The owner equity would be

= Total assets - total liabilities

= $85,000 - $62,000

= $23,000

At the end of the year

The total liabilities would be

= Total assets - total owners equity

= $110,000 - $60,000

= $50,000

The investment by owner would be

= Ending balance of owners equity + drawing - opening balance of owners equity + total expenses - total revenues

= $60,000 + $18,000 - $23,000 + $140,000 - $175,000

= $20,000