Question

1. If Total Liabilities are $3,900 and Total Equity is $2,800 then what is the value...

1. If Total Liabilities are $3,900 and Total Equity is $2,800 then what is the value of Total Assets??

2. Evaluate each of the following transactions in terms of their effect on assets, liabilities, and equity.

1. Purchase equipment for $50,000 in cash
2. Borrow $67,000 from a bank

What is the net change in Total Liabilities?

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Homework Answers

Answer #1

1. Total Assets = 3900+2800 = 6700

2.

Purchase equipment for $50,000 in cash

Assets No Effect
Liability No Effect
Equity No Effect

It will decrease the Cash and Increase the Fixed Assets. So in Net no change in the Assets.

Borrow $67,000 from a bank

Assets Increase
Liability Increase
Equity No Effect

Cash will increase and Loan Liability will increase.

Net change in Total Liability will be 67,000


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