# Equity Bookkeeping Question

by Sandra
(Louisiana)

Equity Question

At the beginning of the year, Precise Solution liabilities equal \$59,000.

During the year, assets increased by \$60,000, and at year-end assets equal \$190,000.

Liabilities decreased \$14,000 during the year.

What are the beginning and ending amounts of equity?

### Comments for Equity Bookkeeping Question

Average Rating

 Aug 31, 2011 Rating Equity Question by: If at the beginning of the year, liabilities equal \$59,000 and during the year, assets increased by \$60,000, and at year-end assets equal \$190,000 while Liabilities decreased \$14,000 during the year, then I believe the beginning equity would be 71,000 and the ending equity would be 145,000. This is calculated as follows: Assets = Liabilities + Owner's Equity So at the beginning of the year the formula would be: 130,000 = 59,000 + 71,000 [assets = 130000 (190000-60000), liabilities = 59000 and equity = 71000 (130000 - 59000)] While at the end of the year the formula would be: 190,000 = 45,000 + 145,000 [assets = 190000, liabilities = 45000 (59000 - 14000) and equity = 145000 (190000 - 45000)]

## Owner's Equity

Fundamental Accounting Equation

Is it true that the equation assets minus liabilities equals owner's equity?

How does this equation represent the financial position of a business and the ownership stake of its owners?

Can you explain the relationship between assets, liabilities, and owner's equity in determining the net worth and value of a company?

Furthermore, how do changes in assets or liabilities affect owner's equity?