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23 January, 20:57

1. Use the accounting equation to solve for equity. 2. If next year assets increased by $ 4 comma 200 and equity decreased by $ 2 comma 580 , what would be the amount of total liabilities for Jefferson Handyman Services?

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  1. 23 January, 21:18
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    Amount of Total Liabilities = $6,780

    Explanation:

    We know that the standard accounting equation is as follows:

    Assets = Liabilities + Equity

    As with an "=" sign in the equation the left and right side always remains equal.

    Thus, for the information provided we have

    Increase in assets by $4,200

    Decrease in equity by $2,580

    Therefore, putting values in equation we have,

    + $4,200 = Liabilities - $2,580

    Therefore,

    $4,200 + $2,580 = $6,780 = Liabilities

    Since the value is positive, there is an increase in value of liabilities by $6,780
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