Question

At the beginning of 2011, Bonds Company had total assets of $650,000 and total liabilities of $390,000. Answer each of the following questions.

1. If total assets increased $60,000 and stockholders' equity decreased $90,000 during the year, determine the amount of total liabilities at the end of the year.

2. During the year, total liabilities decreased $75,000 and stockholders' equity increased $50,000. Compute the amount of total assets at the end of the year.

3. If total assets decreased $100,000 and total liabilities increased $55,000 during the year, determine the amount of stockholders' equity at the end of the year.

Answer 1

Solution:

We know that

Total assets = Total stockholders'equity + Total liabilities

1.)

	Total Assets	=	Total stockholders'equity	+	Total liabilities
Beginning	$650,000	=	$260,000($650,000 - $390,000)	+	$390,000
Change	$60,000	=	(90,000)
Ending	$710,000	=	$170,000	+	$540,000($710,000 - $170,000)

2.)

	Total Assets	=	Total stockholders'equity	+	Total liabilities
Beginning	$650,000	=	$260,000($650,000 - $390,000)	+	$390,000
Change		=	$50,000		$(75,000)
Ending	$625,000	=	$310,000	+	$315000

3.)

	Total Assets	=	Total stockholders'equity	+	Total liabilities
Beginning	$650,000	=	$260,000($650,000 - 390,000)	+	$390,000
Change	$(100,000)				$55,000
Ending	$550,000		$105,000($550,000 - $445,000)	+	$445,000

* If you have any query, please ask me.