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JamesJ Group Title

For Tania08: At the beginning of the year, Quasar Company's liabilities equal $51,000. During the year, assets increase by $60,000, and at year-end assets equal $190,000. Liabilities decrease $12,000 during the year. What are the beginning and ending amounts of equity?

  • 2 years ago
  • 2 years ago

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  1. Tania08 Group Title
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    I'm here now.

    • 2 years ago
  2. JamesJ Group Title
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    Again, start with Assets = Liabilities + Equity BOY* _________ $51,000 _________ Change $60,000 ($12,000) _________ EOY** $190,000 _________ _________ *BOY = Beginning of Year **EOY = End of Year Now, fill in the gaps in this table.

    • 2 years ago
  3. Tania08 Group Title
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    I'm lost. :/

    • 2 years ago
  4. JamesJ Group Title
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    Assets = Liabilities + Equity. Agreed on that?

    • 2 years ago
  5. Tania08 Group Title
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    Yes, I get that part.

    • 2 years ago
  6. JamesJ Group Title
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    Good. Next, you're given four pieces of information: - liabilities at beginning of year: $51,000 - change in assets during year: $60,000 - assets at end of year: $190,000 - change in liabilities during year: ($12,000) .... where as usual ( ) around a number means negative So what I've done is create a table to show that information. That's what this is: Assets = Liabilities + Equity BOY* _________ $51,000 _________ Change $60,000 ($12,000) _________ EOY** $190,000 _________ _________

    • 2 years ago
  7. JamesJ Group Title
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    talk to me ... tell me what's working and what's not

    • 2 years ago
  8. JamesJ Group Title
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    talk to me or I'm out of here.

    • 2 years ago
  9. Tania08 Group Title
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    Ok umm

    • 2 years ago
  10. JamesJ Group Title
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    So given this information: Assets = Liabilities + Equity BOY* _________ $51,000 _________ Change $60,000 ($12,000) _________ EOY** $190,000 _________ _________ What are the assets at the beginning of the year, BOY?

    • 2 years ago
  11. JamesJ Group Title
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    You know what the assets are at the end of the year (EOY), and you know how much they changed. Hence what were they at the BOY?

    • 2 years ago
  12. JamesJ Group Title
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    Let X = assets at the beginning of the year. X + $60,000 = $190,000 Hence what is X?

    • 2 years ago
  13. JamesJ Group Title
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    X must be $130,000. If you end the year with $190,000 of assets, and during the year the assets changed by $60,000, it must be that we started the year with $130,000 of assets. Hence our table now looks like this: Assets = Liabilities + Equity BOY* $130,000 $51,000 _________ Change $60,000 ($12,000) _________ EOY** $190,000 _________ _________ Now, given that, you can calculate the equity at the beginning of the year, one of the two things the question originally asked you for. In fact, you should really have no trouble filling in every blank in this table.

    • 2 years ago
  14. Tania08 Group Title
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    Can you just tell me what I have to add and subtract?

    • 2 years ago
  15. JamesJ Group Title
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    Well, Assets = Liabilities + Equity Hence what is Equity on this line: Assets = Liabilities + Equity BOY* $130,000 $51,000 _________

    • 2 years ago
  16. Tania08 Group Title
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    I need two answers though.

    • 2 years ago
  17. JamesJ Group Title
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    I know ... and this is how you get there.

    • 2 years ago
  18. JamesJ Group Title
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    Figure out how to complete the table. Think it through and be logical. Complete each row in turn. It's really not hard to figure out what to subtract and what to add.

    • 2 years ago
  19. JamesJ Group Title
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    For example, with the first row, we have Assets = Liabilities + Equity BOY* $130,000 = $51,000 + ______ What value of Equity makes sense here?

    • 2 years ago
  20. Vinicius_Caldas Group Title
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    Is the answer of equity $79.000?

    • 2 years ago
  21. Tania08 Group Title
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    How did you get that?

    • 2 years ago
  22. Vinicius_Caldas Group Title
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    Sorry, I´ve answered just the inicital equity. It follows the right answers: initial equity = 79.000,00 and the final equity = 127.000,00. You have the following data: initial liabiliaties (IL), the asset´s variation (VA), the final asset (FA) and the liabilities variation (VL). So, Initial asset (IA)= FA - VA = 190.000-60.000 = 130.000. Inital equity = IA- IL = 130.000-51.000 = 79.000. Using the same reasoning, you will get the final equity, because the final liabilities (FL) = IL+VL = 51000+12000 = 63.000. The final equity = FA-FL = 190.0000-63.000 = 127.000. Did you realize that the equity´s variation is equal to asset´s variation minus liabilities variation, i.e, 48.000? You got?

    • 2 years ago
  23. Tania08 Group Title
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    SO its 127000?

    • 2 years ago
  24. Vinicius_Caldas Group Title
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    There was two questions: the value of equity at the beggining and at the end. At the beggining the answer is 79.000, and at the end the answer is 127.000.

    • 2 years ago
  25. Tania08 Group Title
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    127000 is wrong. =/

    • 2 years ago
  26. Vinicius_Caldas Group Title
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    Ok. The problem was that the liabilities " decreased"...

    • 2 years ago
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