Question

A company started the year with the following: Assets $121,000; Liabilities $41,500; Common Stock $71,500; Retained Earnings $8,000. During the year, the company earned revenue of $6,400, all of which was received in cash, and incurred expenses of $3,700, all of which were unpaid as of the end of the year. In addition, the company paid dividends of $2,400 to owners. Assume no other activities occurred during the year. The amount of liabilities at the end of the year is

Answer 1

$45,200

Step-by-step explanation:

According to the scenario, the computation of the given data are as follows:

Liabilities = $41,500

Expense incurred during year = $3,700

So, we can calculate the total amount of liabilities by using the following formula:

Liabilities at the end of the year = Liabilities + Expense incurred

Liabilities at the end of the year = $41,500 + $3,700

= $45,200