The summaries of balance sheet and income statement data follow.

beginning of year:
total assets $ 85,000
total liabilities 62,000
total owner’s equity ?

end of year:
total assets 110,000
total liabilities ?
total owner’s equity 60,000

changes during year in owner’s equity:
investments by owner ?
drawings 18,000
total revenues 175,000
total expenses 140,000

required: calculate the missing items above.

Total owner’s equity = $23,000

Total liabilities =$50,000

Investment by owner =  $20,000

Explanation:

We use the accounting equation which is presented below:

Total assets = Total liabilities + owners equity

At the beginning of the year

The owner equity would be

= Total assets - total liabilities

= $85,000 - $62,000

= $23,000

At the end of the year

The total liabilities would be

= Total assets - total owners equity

= $110,000 - $60,000

= $50,000

The investment by owner would be

= Ending balance of owners equity + drawing - opening balance of owners equity + total expenses - total revenues

= $60,000 + $18,000 - $23,000 + $140,000 - $175,000

= $20,000

answer; planning;

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