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13 August, 17:53

Q 1.25: If total liabilities increased by $95,000 and stockholders' equity increased by $45,000 during a period of time, then total assets must change by what amount and direction during that same period?

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  1. 13 August, 18:01
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    The total asset are increased by $140,000

    Explanation:

    As we know that:

    Assets = Equity + Liabilities

    So if Equity is increased by $45,000 and liabilities are increase by $95,000, then by putting the values in the above equation we have:

    Assets = $45,000 + $95,000 = $140,000

    The total assets are increased by $140,000 due to the changes in the liabilities and equity changes.
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