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:Multiple Choice$1,896.$1,744.$2,876.$1,672.
Question
At the beginning of the fiscal year, the balance sheet showed assets of 1,672. During the year, assets increased 76.Stockholders' equity at the end of the year totaled:Multiple Choice1,744.1,672.
Solution
The formula for the balance sheet is: Assets = Liabilities + Stockholders' Equity.
At the beginning of the year, we know that Assets = 1,672. We can use these to find the Liabilities at the beginning of the year:
1,672 (Stockholders' Equity)
So, Liabilities = 1,672 = $1,056.
During the year, assets increased by 76. So, the values at the end of the year are:
Assets = 148 = 1,056 - 980.
We can now find the Stockholders' Equity at the end of the year:
980 (Liabilities) + Stockholders' Equity
So, Stockholders' Equity = 980 = $1,896.
Therefore, the Stockholders' Equity at the end of the year totaled $1,896.
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