Question

Annie Rasmussen, capital, as of December 31, 2019, assuming that assets decreased by $168,000 and liabilities increased by $15,000 during 2019. $3, 250, 30 d. Annie Rasmussen, capital, as of December 31, 2019, assuming that assets increased by $175,000 and liabilities decreased by $18,000 during 2019. e. Net income (or net loss) during 2019, assuming that as of December 31, 2019, assets were $880,000, liabilities were $220,000, and there were no additional investments or withdrawals. If you know two figures for the accounting equation (Assets Liabilities + Owner's Equity you can rearrange it to calculate the missing amounts.

Answer 1

Answer:

c. $357,000

d. $733,000

e. $120,000

Explanation:

As we know that

Total assets = Total liabilities + Shareholder equity

The computation is shown below:

c. Updated assets would be

= $720,000 - $168,000

= $552,000

And, the updated liabilities would be

= $180,000 + $15,000

= $195,000

So, the updated capital would be

= $552,000 - $195,000

= $357,000

d. Updated assets would be

= $720,000 - $175,000

= $895,000

And, the updated liabilities would be

= $180,000 - $18,000

= $162,000

So, the updated capital would be

= $895,000 - $162,000

= $733,000

e. The opening capital would be

= Total assets - total liabilities

= $720,000 - $180,000

= $540,000

And, the ending capital would be

= Total assets - total liabilities

= $880,000 - $220,000

= $660,000

So, the gain would be

= Ending capital balance - opening capital balance

= $660,000 - $540,000

= $120,000