Question 5 At the beginning of the year, Morales Company had total assets of $ 8

Question

Question 5 At the beginning of the year, Morales Company had total assets of $ 851,000 and total liabilities of $ 561,000. (Treat each item independently.) (a) If total assets increased $180,000 during the year and total liabilities decreased $ 81,000, what is the amount of stockholders' equity at the end of the year? Stockholders' equity (b) During the year, total liabilities increased $ 102,000 and stockholders' equity decreased $ 71,000. What is the amount of total assets at the end of the year? Total assets (c) If total assets decreased $ 81,000 and stockholders' equity increased $107,000 during the year, what is the amount of total liabilities at the end of the year? Total liabilities

Explanation / Answer

Assets = Liabilities + Stockholders' Equity Beginning of Year: $851,000 = $561,000 + Stockholders' Equity Stockholders' Equity = $851,000 - $561,000 Stockholders' Equity = $290,000 Answer a. End of Year: Total Assets = $851,000 + $180,000 = $1,031,000 Total Liabilities = $561,000 - $81,000 = $480,000 As per Equation: $1,031,,000 = $480,000 + Stockholders' Equity Stockholders' Equity = $1,031,000 - $480,000 Stockholders' Equity = $551,000 Answer b. End of Year: Total Liabilities = $561,000 + $102,000 = $663,000 Stockholders' Equity = $290,000 - $71,000 = $219,000 As per Equation: Total Assets = $663,000 + $219,000 Total Assets = $882,000 Answer c. End of Year: Total Assets = $851,000 - $81,000 = $770,000 Stockholders' Equity = $290,000 + $107,000 = $397,000 As per Equation: $770,000 = Total Liabilities + $397,000 Total Liabilities = $770,000 - $397,000 Total Liabilities = $373,000

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.