Question

Calculate total equity if:
a) Owners Equity in the beginning is Rs60000
b)Equity of Creditors at the end is Rs 50000
c) Income during the year is Rs 70000
d)Expenses during the period is Rs 65000
Calculate Owners Equity at the end

Answer 1

Hi Karan,
The solution to your query is provided below.
$$\begin{gathered} \mathrm{Owner}\text{'}\mathrm{s}\mathrm{Equity}=\mathrm{Owner}\text{'}\mathrm{s}\mathrm{Equity}+\mathrm{Incomes}-\mathrm{Expenses} \\ (\mathrm{at}\mathrm{the}\mathrm{end})(\mathrm{in}\mathrm{the}\mathrm{beginning}) \\ \mathrm{Owner}\text{'}\mathrm{s}\mathrm{Equity}=60,000+70,000-65,000=\mathrm{Rs}65,000 \\ \mathrm{Total}\mathrm{Equity}=\mathrm{Equity}\mathrm{of}\mathrm{Creditors}+\mathrm{Owner}\text{'}\mathrm{s}\mathrm{Equity} \\ (\mathrm{at}\mathrm{the}\mathrm{end}) \\ \mathrm{Total}\mathrm{Equity}=50,000+65,000=\mathrm{Rs}1,15,000 \end{gathered}$$

Hope this answers your query.
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