Question

A company’s financial records at the end of the year included the following amounts: Cash $ 70,000 Accounts Receivable 28,000 Supplies 4,000 Accounts Payable 10,000 Notes Payable 5,000 Retained Earnings, beginning of year 17,000 Common Stock 40,000 Service Revenue 53,000 Wages Expense 8,000 Advertising Expense 5,000 Rent Expense 10,000 What is the amount of total stockholders' equity that would be reported on the Balance Sheet at the end of the year?

Answer 1

Answer:

Total stockholders' equity  87,000

Explanation:

To solve for total stockholders' equity we can determinate using the accounting equation:

Assets = Liabilities + Equity

We need to determinate asset and and liabilities:

Assets:

Cash                            70,000

Accounts Receivable 28,000

Supplies                        4,000

Total Assets:             102,000

Liabilities:

Accounts Payable    10,000

Notes Payable           5,000

Total Liabilities          15,000

102,000 = 15,000 + Equity

Equity = 102,000 - 15,000 =  87,000