Asked by Saatvic Arora on Jul 05, 2024
Verified
At the beginning of the period,a company had $350,000 worth of assets,$110,000 worth of liabilities,and $240,000 worth of equity.Assume the only change during the period was a $30,000 purchase of equipment by issuing a note payable.Show the accounting equation with the appropriate amounts at the end of the period.
Note Payable
A written agreement where one party promises to pay another party a certain amount of money at a future date or on demand.
Accounting Equation
The foundational principle of accounting that maintains that assets equal the sum of liabilities and owner's equity.
Equity
Ownership interest in a company, representing the amount of assets that would be returned to shareholders if all debts were paid.
- Understand and apply the accounting equation and its components (assets, liabilities, equity).
- Describe the effects of business transactions on the accounting equation.
Verified Answer
Ending assets = $350,000 + $30,000
Ending liabilities = $110,000 + $30,000
Ending equity = $240,000 (no change)
Learning Objectives
- Understand and apply the accounting equation and its components (assets, liabilities, equity).
- Describe the effects of business transactions on the accounting equation.
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