Fritz Evans is the owner and operator of Be-The-One, a motivational consulting business. At the end of its accounting period, December 31, 2018, 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, 2018.
b. Owner’s equity as of December 31, 2019, assuming that assets decreased by $65,000 and liabilities increased by $36,000 during 2019.
Answer:
a. A = L + OE $395,000 = $97,000 + OE
OE = $298,000 b. A = L + OE
–$65,000 = +$36,000 + OE OE = –$101,000 OE on December 31, 2019 = $298,000 – $101,000 = $197,000