At the beginning of the year Morales Company had total asset

At the beginning of the year, Morales Company had total assets of $865,000 and total liabilities of $517,000. (Treat each item independently.)

(a) If total assets increased $170,000 during the year and total liabilities decreased $73,000, what is the amount of stockholders’ equity at the end of the year?

(b) During the year, total liabilities increased $103,000 and stockholders’ equity decreased $80,000. What is the amount of total assets at the end of the year?

(c) If total assets decreased $87,000 and stockholders’ equity increased $106,000 during the year, what is the amount of total liabilities at the end of the year?

Solution

total assets =total liabilities+total equity

Hence total equity at beginning=(865000-517000)=$348000

a.Total assets at end=(865000+170,000)=$1035000

Total liabilities at end=(517000-73000)=$444,000

Hence total equity=(1035000-444000)=$591000.

b.Total liabilites=(517000+103000)=$620,000

Total equity=(348000-80,000)=$268000

Hence total assets=(620,000+268000)=$888,000

c.Total assets=(865000-87000)=$778000

Total equity=(348000+106000)=$454000

Hence total liabilities=(778000-454000)=$324000.