Question

Assets increased $191,000 and the liabilities decreased $34,600. Canton Company's stockholders' equity at December 31, 2016 was $423,000. What amount was stockholders' equity at January 1, 2016?

a) $648,600.
b) $197,400.
c) $266,600.
d) $579,400.

Answer 1

(d) $579,400

Explanation:

As per the question,

We have been provided that,

Assets increased = $191,000

Liabilities decreased = $34,600

Beginning stockholders' equity at December 31, 2016

= $191,000 - $34,600

= $156,400

Canton Company's stockholders' equity at December 31, 2016 was $423,000.

Therefore,

Stockholders' equity = $156,400 + $423,000

= $579,400.

Hence, the amount of stockholders' equity at January 1, 2016 = $579,400.

Hence, the correct option is (d) $579,400.