Question

If total assets decreased by $49,029 during a period of time and stockholders' equity increased by $27,095 during the same period, then the amount and direction (increase or decrease) of the period's change in total liabilities is

Answer 1

The change in total liabilities of the period is decrease of $76,124

Step-by-step explanation:

The change in total liabilities of the period is computed as using the accounting equation of the Accounts which is as:

Assets = Liabilities + Stockholders' equity

where

Assets decrease so, it will be -$49,029

Stockholders' equity increased so, it will be +$27,095

So, putting the values above:

-$49,029 = Liabilities + (+$27,095)

Liabilities = - $27,095 - $49,029

Liabilities = -$76,124

Therefore, the change in the total liabilities is decrease of $76,124