2. For each of the following cases, determine the values of 1) assets, 2) liabilities and 3) owners equity at the end of 2014. Jim opened his own yogurt shop on 1/1/2014 with his own $10,000 cash and another $5,000 borrowed from Kate. He promised to pay Kate 10% annual interest. Immediately after he opened the shop, Jim purchased a yogurt machine for $8,000. The machine can be used for 20 years (assume straight-line usage).

Case 1: In 2014, Jim made a total revenue of $6,000 and total expense (excluding depreciation) is equal to $2,000. Jim did not pay Kate for the principle or the interest during 2014.

Case 2: Jims business was not successful. By the end of 2014, he only has $1,000 dollar left plus the machine. He decides to liquidate the business and pay off his debt.