At the beginning of the year business had total assets of 50,000 and total liabilities of 15,000. if total liabilities decreased by 10,000 during the year how much the amount of total assets in the end of the year?
To calculate the amount of total assets at the end of the year, we need to consider the change in total liabilities.
Given that at the beginning of the year total assets were 50,000 and total liabilities were 15,000, we can use the accounting equation:
Total Assets = Total Liabilities + Owner's Equity
Rearranging this equation, we have:
Owner's Equity = Total Assets - Total Liabilities
At the beginning of the year, the owner's equity was:
Owner's Equity = 50,000 - 15,000 = 35,000
Now, if total liabilities decreased by 10,000 during the year, the new amount of total liabilities at the end of the year would be:
New Total Liabilities = 15,000 - 10,000 = 5,000
To find the total assets at the end of the year, we can use the same accounting equation:
Total Assets = Total Liabilities + Owner's Equity
Plugging in the values:
Total Assets = 5,000 + 35,000 = 40,000
Therefore, the amount of total assets at the end of the year is 40,000.