Basic Accounting Equation Question

by Trina Brown
(Griffin, GA)

Before you begin: For purposes of exams and testing it's important to make sure you not only answer the questions correctly but are completing them at the right speed. Be sure to use a watch or clock to time yourself for this exercise.

Difficulty Rating:
Beginner

Time limit:
5 minutes



 accounting equation Assets = Owner's Equity + Liabilities Q: Lynn Shackelford is the owner and operator of Galaxy LLC, a motivational consulting business. At the end of its accounting period, December 31, 2011, Galaxy has assets of $823,000 and liabilities of $198,000.

Using the accounting equation, determine the following amounts:

Owner's equity, as of December 31, 2012, assuming that assets increased by $156,000 and liabilities increased by $48,000 during 2012.


See comment further below for the answer to this question and detailed calculations...


Related Questions & Tutorials:
Return to our Full Basic Accounting Equation Tutorial

Check out more Basic Accounting Questions and Answers

Comments for Basic Accounting Equation Question

Click here to add your own comments

Please help me
by: Anonymous

I want to know this answer.

A:

The accounting equation is
ASSETS = LIABILITIES + EQUITY

So, for the year ended 2012:

Assets ($823,000 + $156,000) = $979,000
Liabilities ($198,000 + $48,000) = $246,000

Equity = Assets - Liabilities
Equity = $979,000 - $246,000
Equity = $733,000

The Equity as of December 31, 2012 is $733,000

Click here to add your own comments

Return to Ask a Question About This Lesson!.








© Copyright 2009-2020 Michael Celender. All Rights Reserved. 
Click here for Privacy Policy.