The Accounting Equation

Using the accounting equation, answer each of the following independent questions.

1. Burlin Company starts the year with $148,000 in assets and $29,600 in liabilities. Net income for the year is $37,000, and no dividends are paid. How much is owners' equity at the end of the year?  

$ __________________

2. Chapman Inc. doubles the amount of its assets from the beginning to the end of the year. Liabilities at the end of the year amount to $39,000, and owners' equity is $29,000. What is the amount of Chapman's assets at the beginning of the year?

$ __________________

3. During the year, the liabilities of Dixon Enterprises triple in amount. Assets at the beginning of the year amount to $39,000, and owners' equity is $23,000. What is the amount of liabilities at the end of the year?

$ __________________

1) Assets = Liabilities + Stockholders' Equity. Determine beginning balance of stockholders' equity. Capital stock and retained earnings make up stockholders' equity. Retained earnings is increased with net income and decreased with dividends.

2) Assets = Liabilities + Stockholders' Equity. Determine ending balance of assets. Beginning balance was half of ending asset balance.

3) Assets = Liabilities + Stockholders' Equity. Determine beginning balance of liabilities. Triple liability beginning balance for ending balance.