Please explain this to me thoroughly, It's need for a homework assignment and I am completely clueless.
The first step in the question is to find out the begining balance of each itme. The begining balance is based on the equation;
Assets = Liabilities + Stockholder's equity
The Liabilities of $ 320000 in begining and Paid in capital of $ 30000 in the begining has been given.
However, the Begining Balance of RE has not been given but the ending balance of RE has been given in the question.
Therefore, to compute the Begining balance of RE back computation has to be made.
Sorry about that. What wasn’t helpful?