Exercise 1-8 Using the accounting equation L.O. A1, P1 Answer the following questions. (Hint: Use the accounting equation.) (Omit the "$" sign in your response.) Exercise 1-8 Part a a. Office Mart has assets equal to $120,000 and liabilities equal to $83,000 at year-end. What is the total equity for Office Mart at year-end?

Exercise 1-8 Using the accounting equation L.O. A1, P1

Answer the following questions. (Hint: Use the accounting equation.) (Omit the "$" sign in your response.)

Exercise 1-8 Part a

a.	Office Mart has assets equal to $120,000 and liabilities equal to $83,000 at year-end. What is the total equity for Office Mart at year-end?

Total equity

$ 37,000

Explanation:

Assets	=	Liabilities	+	Equity
$120,000	=	$83,000	+	$37,000

Exercise 1-8 Part b

b.	At the beginning of the year, Logan Company's assets are $162,000 and its equity is $121,500. During the year, assets increase $80,000 and liabilities increase $57,000. What is the equity at the end of the year?

Equity at the end of the year

$ 144,500

Explanation:

Using the accounting equation at the beginning of the year:

Assets	=	Liabilities	+	Equity
$162,000	=	$40,500	+	$121,500

Using the accounting equation at the end of the year:

Assets	=	Liabilities	+	Equity
$162,000 + $80,000	=	$40,500 + $57,000	+	Equity
$242,000	=	$97,500	+	$144,500

Exercise 1-8 Part c

c.	At the beginning of the year, Keller Company's liabilities equal $64,000. During the year, assets increase by $60,000, and at year-end assets equal $190,000. Liabilities decrease $19,000 during the year. What are the beginning and ending amounts of equity?

Beginning equity	$ 66,000
Ending equity	$ 145,000

Explanation:

Using the accounting equation at the end of the year:

Assets	=	Liabilities	+	Equity
$190,000	=	$64,000 – $19,000	+	Equity
$190,000	=	$45,000	+	$145,000

Using the accounting equation at the beginning of the year:

Assets	=	Liabilities	+	Equity
$190,000 – $60,000	=	$64,000	+	Equity
$130,000	=	$64,000	+	$66,000