At the beginning of the fiscal year, the balance sheet showed assets of $2,728 and stockholders' equity of $1,672. During the year, assets increased $148 and liabilities decreased $76. Stockholders' equity at the end of the year totaled:

Question

Alessandro Ross

Business

28 July, 10:41

At the beginning of the fiscal year, the balance sheet showed assets of $2,728 and stockholders' equity of $1,672. During the year, assets increased $148 and liabilities decreased $76. Stockholders' equity at the end of the year totaled:

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Answers (1)

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Karma Weiss · Answer 1

Year end stockholders' equity is $ 1.896

Explanation:

To determine the year end equity balances we need to find the opening balances of each of the components.

Assets = Liabilities + Stockholders' equity

The opening balances are:

$ 2,728 = Liabilities + $ 1,672

By solving the equation we determine the Opening Liabilities to be $ 1,056

Next stage is computing the ending balances of assets and liabilities

Year end assets = Opening assets + increase in assets

$ 2,728 + $ 148 = $ 2,876

Year end Liabilities = Opening Liabilities - decrease in liabilities

$ 1,056 - $ 76 = $ 980

Year end Equity = Year end assets - year end liabilities

$ 2,876 - $ 980 = $ 1,896