Question

Brief Exercise 1-2 Given the accounting equation, answer each of the following questions. (a) The liabilities of Whispering Winds Company are $123,000 and its stockholders' equity is $240,500. What is the amount of Whispering Winds Company's total assets? Whispering Winds Company's total assets $ (b) The total assets of Whispering Winds Company are $196,500 and its stockholders' equity is $90,500. What is the amount of its total liabilities? Whispering Winds Company's total liabilities $ (c) The total assets of Whispering Winds Company are $799,500 and its liabilities are equal to one-half of its total assets. What is the amount of Whispering Winds Company's stockholders' equity? Whispering Winds Company's stockholders' equity $

Answer 1

Answer

Answer of Part a:

Whispering Company’s Total Assets = Total Liabilities + Stockholders Equity

Whispering Company’s Total Assets = $123,000 + $240,500

Whispering Company’s Total Assets = $363,500

Answer of Part b:

Whispering Company’s Total Liabilities = Total Assets – Stockholders Equity

Whispering Company’s Total Liabilities = $196,500 - $90,500

Whispering Company’s Total Liabilities = $106,000

Answer of Part c:

Whispering Company’s Stockholders Equity = Total Assets – Total Liabilities

Whispering Company’s Stockholders Equity = $799,500 – ($799,500 *1/2)

Whispering Company’s Stockholders Equity = $799,500 - $399,750

Whispering Company’s Stockholders Equity = $399,750