(Learning Objective 3: Applying the accounting equation) Answer these questions about two companies.

1 Sapphire, Inc., began the year with total liabilities of €90,000 and total shareholders’

equity of €35,000. During the year, total assets increased by 30%. How much are total assets at the end of the year?

2 Southbound Airlines Ltd. began the year with total assets of €95,000 and total liabilities of €47,000. Net income for the year was €26,000, and dividends were zero. How much is shareholders’ equity at the end of the year?