Answer:
The answer is: In year 2, Roger Company's total assets are $139,000 and its total liabilities are $85,000.
Explanation:
We start with total assets and liabilities:
Assets - we add accounts receivable and equipment, we subtract cash paid for accounts payable and equipment.
Liabilities - we subtract accounts payable that were paid off
Assets Liabilities
End of year 1 $150,000 $100,000
Accounts payable (paid) -$15,000
Cash (paid AP) -$15,000
Accounts receivable (added) $4,000
Equipment (added) $10,000
<u>Cash (paid Equip) -$10,000 </u>
End of year 2 $139,000 $85,000
