At the beginning of the year, Keller Company's liabilities equal $60,000. During the year, assets increased by $80,000, and at year-end assets equal $180,000. Liabilities decrease $10,000 during the year. What are the beginning and ending amount of equity?

40,000 / end of year 130,000

At the beginning of the year, Keller Company's liabilities equal $60,000. During the year, assets increase by $80,000, and at year-end assets equal $180,000. 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 equation:

Assets = Liabilities + Equity

We are given that at the beginning of the year, liabilities equal $60,000 and assets increased by $80,000 during the year to reach $180,000 at the year-end. Liabilities decreased $10,000 during the year.

1. Beginning amount of equity:
Using the equation, we can rearrange it to find equity:
Equity = Assets - Liabilities

At the beginning of the year:
Equity = Assets (beginning) - Liabilities (beginning)
Equity = $60,000 - $60,000 = $0

Therefore, the beginning amount of equity is $0.

2. Ending amount of equity:
At the year-end, assets equal $180,000, and liabilities decreased by $10,000 during the year.
Let's calculate the ending amount of equity using the equation:

Equity = Assets (end) - Liabilities (end)
Equity = $180,000 - ($60,000 - $10,000)
Equity = $180,000 - $50,000
Equity = $130,000

Therefore, the ending amount of equity is $130,000.