Fritz evans is the owner and operator of be-the-one, a motivational consulting business.
at the end of its accounting period, december 31, 2013, be-the-one has assets of $395,000
and liabilities of $97,000. using the accounting equation, determine the following amounts:
a. owner's equity as of december 31, 2013.
b. owner's equity as of december 31, 2014, assuming that assets decreased by $65,000
and liabilities increased by $36,000 during 2014.
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2013 Equity: 298,000

2014 Equity: 327,000

Explanation:

(A)

Assets = Liabilities + Equity

395,000 = 97,000 + Equity

395,000 - 97,000 = Equity

298,000 =  Equity

(B)

if asset increase by 65,000

and liabilities increase by 36,000

(395,000 + 65,000)  = (97,000 + 36,000) + Equity

460,000 = 133,000 + Equity

Equity = 460,000 - 133,000 = 327,000

i'ts proportional. if the inflation rate is 12% for example, the cpi will be 12% less.

hope it ,

bioteacher101

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