At the beginning of the year, Keller Company's liabilities equal $75,000. During the year, assets increase by $60,000, and at year-end assets equal $190,000. Liabilities decrease $16,000 during the year. What are the beginning and ending amounts of equity?
15.000
To find the beginning and ending amounts of equity, we need to understand the formula for equity. Equity is the difference between assets and liabilities:
Equity = Assets - Liabilities
Let's calculate the beginning and ending amounts of equity step-by-step:
1. Begin with the given information that liabilities at the beginning of the year are $75,000.
2. Since we know that assets increased by $60,000 during the year, we can calculate the beginning assets by subtracting the increment from the ending assets:
Beginning Assets = Ending Assets - Increase in Assets
Beginning Assets = $190,000 - $60,000
Beginning Assets = $130,000
3. Next, we calculate the ending liabilities by subtracting the decrease in liabilities from the beginning liabilities:
Ending Liabilities = Beginning Liabilities - Decrease in Liabilities
Ending Liabilities = $75,000 - $16,000
Ending Liabilities = $59,000
4. Now we can calculate the beginning and ending equity using the formula:
Beginning Equity = Beginning Assets - Beginning Liabilities
Beginning Equity = $130,000 - $75,000
Beginning Equity = $55,000
Ending Equity = Ending Assets - Ending Liabilities
Ending Equity = $190,000 - $59,000
Ending Equity = $131,000
Therefore, the beginning amount of equity is $55,000, and the ending amount of equity is $131,000.