iCompany s habilities equal one-third of the total assets, and owner\'s equity 4
ID: 2570966 • Letter: I
Question
iCompany s habilities equal one-third of the total assets, and owner's equity 4. At the beginning of the year, Sun Company's assets were $275,000, and its own is $160,000. What is the amount of its liabilities? er's equity was $150,000. During the year, assets increased $75,000 and liabilities decreased S22,500. What is the owner's equity at the end of the year? o2 Owner's Equity and the Accounting Equation A. Daiichi Company's total assets and liabilities at the beginning and end of the year follow Beginning of the year End of the year Assets $175,000 275,000 Liabilities 68,750 162,500 Determine Daiichi's net income or loss for the year under each of the following alternatives 1. The owner made no investments in or withdrawals from the business during the year 2. The owner made no investments in the business but withdrew $27,500 during the year 3. The owner invested $16,250 in the business but made no withdrawals during the year. 4. The owner invested $12,500 in the business and withdrew $27,500 during the year. LO3 Identification of Accounts E6A. 1. Indicate whether each of the following accounts is an asset (A), a liability (L), or aExplanation / Answer
1.
Owner's equity at the beginning of the year
= Assets - Liabilities
= $175,000 - $68,750
= 106,250
Owner's equity at the end of the year
= Assets - Liabilities
= $275,000 - $162,500
= $112,500
Therefore,
Net income for the year
= Owner's equity at the end of the year - Owner's equity at the beginning of the year
= $112,500 - $106,250
= $6,250
2.
Owner's equity at the beginning of the year
= Assets - Liabilities
= $175,000 - $68,750
= 106,250
Owner's equity at the end of the year
= Assets - Liabilities
= $275,000 - $162,500
= $112,500
And,
Owner's withdrawls during the year = $27,500
Therefore,
Net income for the year
= Owner's equity at the end of the year + Owner's withdrawls - Owner's equity at the beginning of the year
= $112,500 + $27,500 - $106,250
= $33,750
3.
Owner's equity at the beginning of the year
= Assets - Liabilities
= $175,000 - $68,750
= 106,250
Owner's equity at the end of the year
= Assets - Liabilities
= $275,000 - $162,500
= $112,500
And,
Owner's additional invstments during the year = $16,250
Therefore,
Net loss for the year
= Owner's equity at the end of the year - Owner's additional investments - Owner's equity at the beginning of the year
= $112,500 - $16,250 - $106,250
= $10,000
4.
Owner's equity at the beginning of the year
= Assets - Liabilities
= $175,000 - $68,750
= 106,250
Owner's equity at the end of the year
= Assets - Liabilities
= $275,000 - $162,500
= $112,500
Owner's withdrawls during the year = $27,500
Owner's additional investments during the year = $12,500
Therefore,
Net income for the year
= Owner's equity at the end of the year + Owner's withdrawl - Owner's additional investment - Owner's equity at the beginning of the year
= $112,500 + $27,500 - $12,500 - $106,250
= $21,250
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