Question

1. Use the accounting equation to solve for equity. 2. If next year assets increased by $ 4 comma 200 and equity decreased by $ 2 comma 580​, what would be the amount of total liabilities for Jefferson Handyman​ Services?

Answer 1

Answer:

Amount of Total Liabilities = $6,780

Explanation:

We know that the standard accounting equation is as follows:

Assets = Liabilities + Equity

As with an "=" sign in the equation the left and right side always remains equal.

Thus, for the information provided we have

Increase in assets by $4,200

Decrease in equity by $2,580

Therefore, putting values in equation we have,

+ $4,200 = Liabilities - $2,580

Therefore,

$4,200 + $2,580 = $6,780 = Liabilities

Since the value is positive, there is an increase in value of liabilities by $6,780