SOLUTION: At the beginning of the year, Wilde Company assets were $220,000 and its owner's equity was $120,000. During the year, assets increased $60,000, and liabilities decreased $18,000.

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Question 45333This question is from textbook principles of accounting
: At the beginning of the year, Wilde Company assets were $220,000 and its owner's equity was $120,000. During the year, assets increased $60,000, and liabilities decreased $18,000. What is the owner's equity at the end of the year? This question is from textbook principles of accounting

Answer by mathgenius(8) About Me  (Show Source):
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First, you need to know this formula: Owner's Equity = Assets Minus Liabilities.
Starting owner's equity was $120,000. Add $60,000 worth of assets to that and also add $18,000 to that as well (because liabilities decreased.) Therefore, final owner's equity would be $198,000.