Question

Accounting Equation

Lynn Shackelford is the stockholder and operator of Way to Go LLC, a motivational consulting business. At the end of its accounting period, December 31, 2017, Way to Go has assets of $529,000 and liabilities of $127,000. Using the accounting equation, determine the following amounts:
a. Stockholders' equity as of December 31, 2017.
$______
b. Stockholders' equity as of December 31, 2018, assuming that assets increased by $101,000 and liabilities increased by $30,000 during 2018.
$______

Answer 1

,Answer:

• a. $420,000
• b. $473,000

Step-by-step explanation:

a. Stockholders' equity December 31, 2017

Assets = Equity + Liabilities

529,000 = Equity + 127,000

Equity = 529,000 - 127,000

= $402,000

b. Stockholders' equity in 2018:

Assets = Equity + Liabilities

(529,000 + 101,000) = Equity + (127,000 + 30,000)

630,000 = Equity + 157,000

Equity = 630,000 - 157,000

= $473,000