At the beginning of the year, Keller Company's liabilities equal $64,000. During the year, assets increase by $60,000, and at year-end assets equal $190,000. Liabilities decrease $10,000 during the year. What are the beginning and ending amounts of equity?
To find the beginning and ending amounts of equity, we need to understand the relationship between assets, liabilities, and equity in an accounting equation.
The accounting equation is as follows:
Assets = Liabilities + Equity
Let's calculate the beginning and ending amounts of equity using the information given.
1. Beginning Amount of Equity:
At the beginning of the year, liabilities equal $64,000. We don't have any information about the specific amount of equity, but we can determine it by rearranging the accounting equation:
Equity = Assets - Liabilities
Since we don't have the assets at the beginning of the year, we cannot calculate the exact beginning amount of equity. However, if we know the equation is true, we can calculate the beginning amount of equity as follows:
Beginning Equity = Beginning Assets - Beginning Liabilities
2. Ending Amount of Equity:
During the year, assets increase by $60,000, and liabilities decrease by $10,000. At the year-end, assets equal $190,000.
Rearranging the accounting equation, we can calculate the ending amount of equity:
Ending Equity = Ending Assets - Ending Liabilities
Now, let's calculate the ending amount of equity using the given information:
Ending Assets = $190,000
Ending Liabilities = Beginning Liabilities - Decrease in Liabilities = $64,000 - $10,000 = $54,000
Ending Equity = $190,000 - $54,000
Therefore, the ending amount of equity is $136,000.
In conclusion, we cannot determine the exact beginning amount of equity based on the information provided. However, the ending amount of equity is $136,000.