Question

fill in the missing values on these financial statements:

December 31, 2015:
Assets	$50,000
Liabilities	[a]
Equity	30,000
December 31, 2016:
Assets	[b]
Liabilities	8,000
Equity	38,000
During 2016:
Total Revenues	[c]
Total Expenses	250,000

Answer 1

The formula to be used here is: Assets = Liabilities + equity

a) Liabilities = $50,000 - $30,000 = $20,000

b) Assets = $8000 + $38000 = $46,000

c) There is another formula for assets i.e.

Assets = Liabilities + Owner's equity + Revenue - Expenses

It can be re-written as:

Assets - Liabilities - Owner's equity + Expenses = Revenue

$46,000 - $8,000 - $38000 + $250,000 = Revenues

Total revenues = $250,000

In balance sheet, the value of total revenue will be equal to the value of total expenses.