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Accounting Equation
Accounting Equation
FUNDAMENTAL ACCOUNTING
EQUATION
EXAMPLE
1. Liabilities = 50,000 while owner’s equity is 150,000. How much is the asset?
Assets = Liability + Equity
? = 50,000 + 150,000
Asset = 200,000
2. Asset is 300,000 while liability is 1/3 of asset. What is owner’s equity?
Asset = liability + Equity
300,000 = 1/3Liability + 2/3 Equity
100,0000 + 200,000
Asset Liability Equity
300,000 130,000 ?170,000
150,000 2/3 of asset (150K /3 *2 =100k) ?(50K)
?187K 120% of equity(85K*120%= 85,000
102K)
?50k/80%=62.5k 50,000 (80% of asset) ?62.5k-50k = 12.5k
125,000 150,000 ?(125k)
Assets Liability Equity
?100k 200,000 300,000
1,000,000 300,000 ?700k
250,000 ?50k 200,000
?300k 1/5 of equity (250/5 = 50k) 250,000
800,000 3/4 of asset ?
?750k 500,000 ½ of liability (500k/2 = 250k)
300k 300k 300,000 ½ of asset