Question

g The shareholders' equity of Diakovsky Company at the beginning and end of 20X6 totaled $16,000 and $21,000, respectively. Assets at the beginning of 20X6 were $25,000. If Diakovsky Company's liabilities increased by $8,000 in 20X6, how much were total assets at the end of 20X6

Answer 1

The total assets at the end of 20X6 for Diakovsky Company is $38,000.

Step-by-step explanation:

To find the total assets at the end of 20X6, we need to calculate the change in shareholders' equity.

Shareholders' equity at the beginning of 20X6 was $16,000, and at the end of 20X6, it was $21,000. Therefore, the change in shareholders' equity is $21,000 - $16,000 = $5,000.

The change in shareholders' equity represents the change in assets. Since liabilities increased by $8,000, the change in assets is $5,000 + $8,000 = $13,000.

Therefore, the total assets at the end of 20X6 are $25,000 (beginning assets) + $13,000 (change in assets) = $38,000.

Answer 2

$38,000

Step-by-step explanation:

The accounting equation shows the relationship between the various elements of the balance sheet which are assets, liabilities and equity. The equation is as shown below;

Assets = Liabilities + Equity

At the beginning of 20x6

$25,000 = liabilities + $16,000

Liabilities = $25,000 - $16,000

= $9,000

If liabilities increases by $8,000

At the end of 20x6,

Liabilities = $9,000 + $8,000

= $17,000

Total Assets = $17,000 + $21,000

= $38,000