Brief Exercise 1-8 Use the basic accounting equation to answer these questions.

Question

Brief Exercise 1-8

Use the basic accounting equation to answer these questions.

(a) The liabilities of Jantz Company are $90,000 and the stockholders’ equity is $230,000. What is the amount of Jantz Company’s total assets?

(b) The total assets of Foley Company are $170,000 and its stockholders’ equity is $80,000. What is the amount of its total liabilities?

(c) The total assets of Sundberg Co. are $800,000 and its liabilities are equal to one-fourth of its total assets. What is the amount of Sundberg Co.’s stockholders’ equity?

Explanation / Answer

(a) Liabilities            90,000 Add:Stock Holder's Equity        2,30,000 Assets        3,20,000 (b) Total Assets        1,70,000 Less: Stock Holder's Equity            80,000 Total Liabilities            90,000 © Total Assets        8,00,000 Less:Liabilities (800000/4)        2,00,000 Stock Holder's Equity        6,00,000 Always total of liabilities and stock holder's equity should be equal to total assets

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