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?

---

Definitions:

Option Contract

A contract giving the buyer the right, but not the obligation, to buy or sell an asset at a specified price within a specific time frame.

Arabian Mare

A female horse of the Arabian breed, known for its endurance, speed, intelligence, and distinctively shaped head and high tail carriage.

Irrevocable

Something not capable of being changed or called back, often used in the context of trusts or certain decisions.

Payment

The act of giving money, goods, or other forms of value in exchange for products, services, or to fulfill a financial obligation.