PRC-1 · Chapter 1 · Question 47 of 100
At the start of the year, 'Dynamic Enterprises' had total assets of Rs. 600,000 and total equity of Rs. 400,000. During the year, total assets increased by Rs. 100,000 and total liabilities decreased by Rs. 50,000. What is the new equity at the end of the year?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Rs. 550,000
Explanation
Initially, Liabilities = 600k (Assets) - 400k (Equity) = 200k. At year-end, Assets are 700k (600k+100k) and Liabilities are 150k (200k-50k). Therefore, new Equity is Assets (700k) - Liabilities (150k) = Rs. 550,000.
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