Terry Fleming is the owner and operator of Go-For-It LLC, a motivational consulting business. At the end of its accounting period, December 31, 2018, Go-For-It has assets of $675,000 and liabilities of $215,000. Using the accounting equation, determine the following amounts:
a. Owner’s equity as of December 31, 2018.
b. Owner’s equity as of December 31, 2019, assuming that assets increased by $112,300 and liabilities increased by $32,000 during 2019.
Answer:
a. A = L + OE $675,000 = $215,000 + OE
OE = $460,000 b. A = L + OE +$112,300 = +$32,000 + OE OE = +$80,300 OE on December 31, 2019 = $460,000 + $80,300 = $540,300