Question

What is the amount of equity on December 31, 2011?

Company
A Company
December 31, 2010
Assets $ 35,000
Liabilities 28,700
December 31, 2011
Assets 38,000
Liabilities ?
During year 2011
Owner investments 6,000
Net income (loss) 8,300
Owner cash
withdrawals 3,500

Answer 1

$17,100

Step-by-step explanation:

For computing the ending equity first we have to determine the beginning equity which is shown below:

As we know that

Accounting equation comprise of

Total assets = Total liabilities + stockholder equity

$35,000 = $28,700 + stockholder equity

So, the stockholder equity is

= $35,000 - $28,700

= $6,300

Now the ending equity is

= beginning equity + owner investments + net income - withdrawls

= $6,300 + $6,000 + $8,300 - $3,500

= $17,100