question 5 2.5 pts at the beginning of the year, cassius companys liabilities equal $350,000. during the…

question 5 2.5 pts at the beginning of the year, cassius companys liabilities equal $350,000. during the year, assets increase by $300,000, and at year - end assets equal $950,000. liabilities decrease $25,000 during the year. the ending amount of equity is: $650,000 $600,000 $675,000 $900,000 $625,000

question 5 2.5 pts at the beginning of the year, cassius companys liabilities equal $350,000. during the year, assets increase by $300,000, and at year - end assets equal $950,000. liabilities decrease $25,000 during the year. the ending amount of equity is: $650,000 $600,000 $675,000 $900,000 $625,000

Answer

Explanation:

Step1: Recall accounting - equation

Equity = Assets - Liabilities.

Step2: Find beginning - assets

Beginning assets are not given directly, but we know the change in assets and ending assets. Let beginning assets be $A_{0}$, ending assets $A_{1}=950000$, and the change in assets $\Delta A$. Since $A_{1}=A_{0}+\Delta A$, we first need to find $\Delta A$. We know liabilities change and other values. But we can also use the accounting - equation in terms of changes.

Step3: Calculate ending - liabilities

Beginning liabilities $L_{0}=350000$, decrease in liabilities $\Delta L = 25000$. So ending liabilities $L_{1}=L_{0}-\Delta L=350000 - 25000=325000$.

Step4: Calculate ending - equity

Using the accounting equation $E_{1}=A_{1}-L_{1}$, substitute $A_{1}=950000$ and $L_{1}=325000$. Then $E_{1}=950000 - 325000 = 625000$.

Answer:

$625000$