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12 June, 08:58

Assets are 300,000 and equity is 100,000, assets increase 80,000 liabilities increase 50,000. what is equity at year end?

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  1. 12 June, 09:45
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    Assets - equity = liabilities

    So liability before the increase is:

    300, 000 - 100, 000 = 200, 000

    And if assets increases by 80, 000. Hence new assets = 380, 000. Liabilities increases by 50, 000; hence new liability = 250, 000.

    New Equity = New Assets - New liability.

    New Equity = 380, 000 - 250, 000 = 130, 000.
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