Question

At the end of the current year, the owner’s equity in LaRose Corporation is $150. During the year, the assets of the business had decreased by $86, and the liabilities had increased by $40. Dividends declared and paid were $32. NO contributed capital transactions occurred. Owner’s equity at the beginning of the year must have been:

Answer 1

We know, Assets = Liabilities + Equity
Therefore, Change in Assets = Change in Liabilities + Change in Equity
During the year, Asset decreased by $ 86 and Liabilities had increased by $ 40
Therefore, Equity must have been decreased by $ 126
It means the company had incurred loss of $ 126 during the year

	Owner's Equity, beginning balance
=	Owner's Equity, ending balance + Net Loss + Dividend Declared
=	$ 150 + $ 126 + $ 32
=	$ 308.00
Therefore, the answer is $ 308