The Walt Disney Company had the following assets and liabilities(in millions) as

Question

The Walt Disney Company had the following assets and liabilities(in millions) as of September 30, 2005.

Assets             $53,158

Liabilities        26,948

a.       Determine thestockholders’ equity of Walt Disney as of September 30,2005.

b.      If assets increased by $6,840and stockholders’ equity increased by $5,610, what was theincrease or decrease in liabilities for the year ending September30, 2006?

c.       What were the totalassets, liabilities, and stockholders’ equity as of September30, 2006?

d.      Based upon your answer to (c),does the accounting equation balance?

Explanation / Answer

A.     Assets   = Liabilities + Ownersequity       53,158 =  26,948   + owners equity owners equity = 53,158 -26,948                      = $ 26,210 B.     Assets = Liabilities + owners equity     53,158 = 26,948 + 26,210 +  6,840                + 5,610 59,998 = Liabilities + 31,820 Liabilities = 59,998 - 31,820    = 28,178 C. Total assets       = $59,998 Total liabilities    =   $28,178 Stockholders equity=    $ 31,820 D. Yes, the equation balances as follows 59,998 = 28,178 + 31,820

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