At the Beginning of the Year, Keats Company Had Total

question 71

Essay

At the beginning of the year, Keats Company had total assets of $750,000 and total liabilities of $250,000. Answer the following questions viewing each situation as being independent of the others.
(1) If total assets increased $200,000 during the year, and total liabilities decreased $75,000, what is the amount of equity at the end of the year?
(2) During the year, total liabilities increased $230,000 and equity decreased $90,000. What is the amount of total assets at the end of the year?
(3) If total assets decreased $40,000 and equity increased $130,000 during the year, what is the amount of total liabilities at the end of the year?

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Definitions:

Cost of Goods Sold

Cost of goods sold (COGS) is the direct costs attributable to the production of the goods sold in a company, including materials and labor costs.

Total Manufacturing Costs

The complete sum of expenses related to producing goods, including labor, materials, and overhead.

Cost of Goods Manufactured

The total cost incurred by a company to produce goods in a specific period, including materials, labor, and overhead.

Overhead Account

An accounting category used to record all indirect costs associated with the production process, such as utilities, rent, and administrative expenses.