At the beginning of the year, Goren Company had total assets of $815,700 and tot

Question

At the beginning of the year, Goren Company had total assets of $815,700 and total liabilities of $576,200. (Treat each item independently.) If total assets increased $155,100 during the year and total liabilities decreased $76,300, what is the amount of stockholders' equity at the end of the year? During the year, total liabilities increased $103,100 and stockholders' equity decreased $74,300. What is the amount of total assets at the end of the year? If total assets decreased $84,300 and stockholders' equity increased $116,200 during the year, what is the amount of total liabilities at the end of the year?

Explanation / Answer

Stockholders' equity (also known as shareholders' equity) is one of the three elements of a corporation's balance sheet and the accounting equation as outlined here: assets = liabilities+ stockholders' equity.

Some view stockholders' equity as a source (along with liabilities) of the corporation's assets. Others think of stockholders' equity as the owners' residual claim after the liabilities have been paid. Stockholders' equity is also the corporation's total book value (which is different from the corporation's worth or market value).

stockholders' equity= assets-liabilities=815700-576200=239500

(a) stockholders' equity= assets-liabilities= (815700+155100)-(576200-76300)=970800-499900=470900

(b) Assets= stockholders' equity+liabilities=(239500-74300)+(576200+103100)=165200+679300= 844500

(c) liabilities= assets- stock holders equity= (815700-84300)-(239500+116200)=731400-355700=375700

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