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

1 Clay, Inc., began the year with total liabilities of $50,000 and total shareholders’ equity of $80,000. During the year, total assets increased by 35%. How much are total assets at the end of the year?

2 EastWest Airlines Ltd. began the year with total assets of $100,000 and total liabilities of $7,000. Net income for the year was $25,000, and dividends were zero. How much is shareholders’ equity at the end of the year?