Use the Accounting Equation to Answer Each of the Independent

question 140

Essay

Use the accounting equation to answer each of the independent questions below.?
(a) At the beginning of the year, Norton Company's assets were $75,000 and its owner's equity was $38,000. Duringthe year, assets increased by $18,000 and liabilities increased by $4,000. What was the owner's equity at theend of the year??
(b) At the beginning of the year, Turpin Industries had liabilities of $44,000 and owner's equity of $66,000. If assetsincreased by $10,000 and liabilities decreased by $5,000, what was the owner's equity at the end of the year?

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Definitions:

Fixed Assets Investment

Expenditures related to acquiring or improving long-term assets such as property, plant, and equipment that will be used in business operations.

Debt-Equity Ratio

The ratio demonstrating the proportionate role of debt and equity in a company's asset financing scheme.

Payout Ratio

The percentage of a company's earnings that is paid out to shareholders in the form of dividends.

Internal Growth Rate

The internal growth rate is a measure of an organization's ability to increase its sales and profit without issuing more stock or incurring new debt.