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Use the basic accounting equation to answer these questions.(a) The liabilities of Carla Vista Company are $86,400 and the stockholders’ equity is $220,800. What is the amount of Carla Vista’s total assets?Total assets$enter the total assets in dollars (b) The total assets of Sandhill Company are $163,200 and its stockholders’ equity is $76,800. What is the amount of its total liabilities?Total liabilities$enter the total liabilities in dollars (c) The total assets of Wildhorse Co. are $768,000 and its liabilities are equal to one-fourth of its total assets. What is the amount of Wildhorse’s stockholders’ equity?Stockholders’ equity$enter the stockholders’ equity in dollars

Question

Use the basic accounting equation to answer these questions.(a) The liabilities of Carla Vista Company are 86,400 andthestockholders’equityis86,400 and the stockholders’ equity is 220,800. What is the amount of Carla Vista’s total assets?Total assetsenterthetotalassetsindollars(b)ThetotalassetsofSandhillCompanyareenter the total assets in dollars (b) The total assets of Sandhill Company are 163,200 and its stockholders’ equity is 76,800.Whatistheamountofitstotalliabilities?Totalliabilities76,800. What is the amount of its total liabilities?Total liabilitiesenter the total liabilities in dollars (c) The total assets of Wildhorse Co. are 768,000 anditsliabilitiesareequaltoone−fourthofitstotalassets.WhatistheamountofWildhorse’sstockholders’equity?Stockholders’equity768,000 and its liabilities are equal to one-fourth of its total assets. What is the amount of Wildhorse’s stockholders’ equity?Stockholders’ equityenter the stockholders’ equity in dollars

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Solution

(a) To find the amount of Carla Vista Company's total assets, we can use the basic accounting equation: Assets = Liabilities + Stockholders' Equity. Given that the liabilities are 86,400andthestockholders′equityis86,400 and the stockholders' equity is 220,800, we can substitute these values into the equation:

Assets = 86,400+86,400 + 220,800 Assets = $307,200

Therefore, the amount of Carla Vista's total assets is $307,200.

(b) Similarly, to determine the amount of Sandhill Company's total liabilities, we can use the basic accounting equation: Assets = Liabilities + Stockholders' Equity. Given that the total assets are 163,200andthestockholders′equityis163,200 and the stockholders' equity is 76,800, we can rearrange the equation to solve for liabilities:

Liabilities = Assets - Stockholders' Equity Liabilities = 163,200−163,200 - 76,800 Liabilities = $86,400

Therefore, the amount of Sandhill Company's total liabilities is $86,400.

(c) In this case, we are given that the total assets of Wildhorse Co. are $768,000 and its liabilities are equal to one-fourth of its total assets. To find the stockholders' equity, we can use the basic accounting equation: Assets = Liabilities + Stockholders' Equity. Let's denote the liabilities as "L":

Assets = L + Stockholders' Equity

Given that liabilities are equal to one-fourth of the total assets, we can express this as:

L = 1/4 * Assets

Substituting the given value of total assets:

L = 1/4 * 768,000L=768,000 L = 192,000

Now, we can substitute the value of liabilities into the basic accounting equation to solve for stockholders' equity:

768,000=768,000 = 192,000 + Stockholders' Equity

Stockholders' Equity = 768,000−768,000 - 192,000 Stockholders' Equity = $576,000

Therefore, the amount of Wildhorse Co.'s stockholders' equity is $576,000.

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