Question

Accounting Equation Sid Summit is the stockholder and operator of Personality Shine LLC, a motivational consulting business. At the end of its accounting period, December 31 2012 Personality Shine has assets of $682,000 and l e s of $164,000. Using the accounting equation, determine the following amounts: Stockholders equity as of December 31, 2012 Stockholders' equity as of December 31, 2013, a mi t assets increased by $130,000 and liabilities increased by $39,000 during 2073.

Answer 1

As per accounting equation :-

Asset = Liabilities + Stockholders Equity

Stockholders Equity = Assets - Liabilities

(a) Stockholders Equity as on December 31, 20Y2 :-

= 682,000 - 164,000 = $518,000

(b) Stockholders Equity as on December 31, 20Y3 :-

= (682,000 + 130,000) - (164,000 + 39,000)

= 812,000 - 203,000 = $609,000