1. Manhattan Inc. had Assets of $140,000 and Liabilities of $112,000 on January 1. During the year Liabilities decreased by $17,500 and the company earned net income of $63,000. Dividends of $ 20,000 were paid. The balance of Assets at the end of the year was:
   1. $220,500
   2. $185,500
   3. $165,500 explain equation
   4. $8,000
2. Detroit Holdings Inc. had Assets of $82,000 and Liabilities of $71,000 on January 1. During the year Assets increased by $20,000 and the company earned net income of $27,000. No dividends were paid. The balance of Liabilities at the end of the year was:
   1. $220,500
   2. $ 64,000 explain equation
   3. $ 7,000
   4. $185,500