Question

At the beginning of the year, Wildhorse Company had total assets of $831,000 and total liabilities of $593,000. (Treat each item independently.) (a) If total assets increased $161,000 during the year and total liabilities decreased $77,000, what is the amount of stockholders’ equity at the end of the year? (b) During the year, total liabilities increased $91,000 and stockholders’ equity decreased $65,000. What is the amount of total assets at the end of the year? (c) If total assets decreased $90,000 and stockholders’ equity increased $117,000 during the year, what is the amount of total liabilities at the end of the year?

(a) If total assets increased $161,000 during the year and total liabilities decreased $77,000, what is the amount of stockholders’ equity at the end of the year?

(b) During the year, total liabilities increased $91,000 and stockholders’ equity decreased $65,000. What is the amount of total assets at the end of the year?

(c) If total assets decreased $90,000 and stockholders’ equity increased $117,000 during the year, what is the amount of total liabilities at the end of the year?

Answer 1

Solution a:

Amount of stockholder's equity at the end of year = Assets - Liabilities = ($831,000 + $161,000) - ($593,000 - $77,000)

= $476,000

solution b:

Amount of total assets at the end of year = Liabilities + stockholder's equity

= ($593,000 + $91,000) + ($238,000 - $65,000) = $857,000

Solution c:

Amount of total liabilities at the end of year = Assets - Stockholder's equity

= ($831,000 - $90,000) - ($238,000 + $117,000) = $386,000