The summaries of balance sheet and income statement data...

The summaries of balance sheet and income statement data follow. Beginning of year: Total assets $ 85,000 Total liabilities 62,000 Total owner’s equity ? End of year: Total assets 110,000 Total liabilities ? Total owner’s equity 60,000 Changes during year in owner’s equity: Investments by owner ? Drawings 18,000 Total revenues 175,000 Total expenses 140,000 Required: Calculate the missing items above.

Transcript

00:01 So we have given summaries of financial statements, namely the balance sheet and the income statement.

00:08 So we want to find out what we can derive from the information that is given.

00:13 So we're going to first look at the analysis.

00:17 The question requires of us to look at the missing items.

00:20 Okay, so first item, okay, so we're going to be looking at the missing items.

00:27 Okay, so the first thing that we basically looking at is owners equity, okay? owners equity and this is at the beginning of the period.

00:43 We understand that owners equity is actually equal to total assets minus total liabilities.

00:54 Okay, so basically we're going to get $85 ,000 is given as the total assets minus $62 ,000, which is given us the total liabilities to give us $23 ,000 for the owner's equity at the beginning.

01:12 And then the other missing information is the total liabilities at the end of the period.

01:21 Total liabilities at the end of the period.

01:23 We're given, if you look at the accounting equation, simply states that the total assets minus equity, we should be able to to give us the total liabilities in this case.

01:37 We are given $110 ,000, less $60 ,000, gives us $50 ,000 as the missing value there.

01:50 Now, obviously, we are going to be looking at the additional onus investment.

01:57 So how much is the additional onus investment? for calculations purposes, we understand that the opening capital of amount, opening capital, which basically is $23 ,000, should be added.

02:18 We should be able to add the owner's equity or honors investment, add investment, or the invested capital.

02:28 So that's the figure that we're looking for.

02:30 But we do have the rest of the information which would need to add to the opening capital things such as the total revenue.

02:41 Total revenue needs to be added day, which is $175 ,000.

02:48 Drawings need to be subtracted or rather expenses.

02:54 We start off with expenses.

02:55 We need to subtract the expenses of $140 ,000.

02:58 So we can actually use brackets to indicate that there are negative figures...