Use the accounting equation to answer each question that follows.
1. At the beginning of the year, Palette Company’s assets were $90,000, and its owner’s equity was $50,000. During the year, assets increased by $30,000 and liabilities increased by $5,000. What was the owner’s equity at the end of the year?
2. At the beginning of the year, Carmines Company had liabilities of $100,000 and owner’s equity of $96,000. If assets increased by $40,000 and liabilities decreased by $30,000, what was the owner’s equity at the end of the year?