Question

The​ stockholders' equity of Kowalski Company at the beginning and end of 2018 totaled $ 122 comma 000 and $ 140 comma 000​, respectively. Assets at the beginning of 2018 were $ 149 comma 000. If the liabilities of Kowalski Company increased by $ 69 comma 000 in 2018​, how much were total assets at the end of 2018​? Use the accounting equation. A. $ 218 comma 000 B. $ 62 comma 000 C. $ 236 comma 000 D. $ 220 comma 000

Answer 1

Answer:

Option (c) is correct.

Explanation:

According to the accounting equation,

Assets = Liabilities + Shareholder Equity

Increase in equity of stockholders:

= Ending stockholders equity - Beginning stockholders equity

= $140,000 - $122,000

= $18,000

Increase in asset during 2018:

= Total asset at the end of 2018 - total asset at the beginning of 2018

Hence,

Increase in asset during 2018 = Increase in liabilities + Increase in equity of stockholders

(Total asset at the end of 2018 - total asset at the beginning of 2018) = (Increase in liabilities + Increase in equity of stockholders)

(Total asset at the end of 2018 - $149,000) = ($69,000 + $18,000)

Total asset at the end of 2018 = $87,000 + $149,000

                                                  = $236,000