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23 January, 20:27

Stockholders' equity at the beginning of the year for ATLAS Inc. was $390,000, while its liabilities totaled $230,000. During the year its assets increased by $75,000; its liabilities decreased by $50,000. Which of these is stockholders' equity at the end of the year for ATLAS Inc.? a.$107,000 b.$98,000 c.$515,000 d.$415,000

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  1. 23 January, 20:41
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    c. 515,000

    Explanation:

    Accountable Equation:

    Assets = Liabilities + Stockholders' equity

    With equation lets first find out Assets at the beginning of the year:

    Assets = Liabilities + Stockholders' equity

    Assets = 230,000 + 390,000

    Assets = 620,000

    Now, according to their increased and decreased, we can calculate Assets and Liabilities final balance.

    Assets = 620,000 + 75,000 = 695,000

    Liabilities = 230,000 - 50,000 = 180,000

    And clearing from the accountable formula Stockholders' equity we can get the result to the question:

    Assets = Liabilities + Stockholders' equity

    Stockholders' equity = Assets - Liabilities

    Stockholders' equity = 695,000 - 180,000

    Stockholders' equity = 515,000
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