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Year 1: You (the owner) contributed $100,000 to the business. At the end of the year, your total assets are $150,000. Assuming that the only activity in addition to you contributing was taking out a bank loan, what are the Total Liabilities at the end of the year?

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hyderali230

Answer:

Total Liabilities at the end of the year are $50,000

Explanation:

Owner Contribution = Equity = $100,000

Total Asset at the end of year = $150,000

Bank Loan =  liabilities = ?

Using Accounting Equation

Total Assets = Total Equity + Total Liabilities

$150,000 = $100,000 + Total Liabilities

Total Liabilities = $150,000 - $100,000

Total Liabilities = $50,000

So total Liabilities at the end of the year is $50,000.