At the beginning of a recent year, JetBlue's assets were $6,549 million and its equity was $1,546 million. During the year, assets increased by $44 million and liabilities decreased by $64 million. What was JetBlue's equity at the end of the year

Question

Business

Jeremy Arellano

19 July, 21:40

At the beginning of a recent year, JetBlue's assets were $6,549 million and its equity was $1,546 million. During the year, assets increased by $44 million and liabilities decreased by $64 million. What was JetBlue's equity at the end of the year

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Rhys Logan · Answer 1

Thus, the JetBlue's equity at the end of the year is $1,654 million

Explanation:

In this case, the accounting equation is used.

Accounting equation means the equation which shows double accounting entry system. Double accounting means debit side and credit side. In this accounting equation, the total assets is equal to total liabilities + total equity.

Total Assets = Total Liabilities + Total Equity

$6549 = Total Liabilities + $1,546

Total Liabilities = $5,003 million

In the question the assets is increased by $44 million whereas liabilities is decreased by $64 million.

So,

Updated asset value = $6,549+$44

= $6,593 million

Updated liabilities value = $5,003 - $64

= $4,939 million

So, the ending equity value will be

= Ending assets - Ending liabilities

= $6,593 million - $4,939 million

= $1,654 million

Thus, the JetBlue's equity at the end of the year is $1,654 million