Question

Assets totaled $24,750 and liabilities totaled $8,550 at the beginning of the year. During the year, assets decreased by $3,550 and liabilities increased by $2,850. What is the amount of the change in stockholders' equity during the year?

Answer 1

Amount of the change in stockholders' equity during the year is $6,400 (Decrease)

Step-by-step explanation:

Assets = $24,750

Liabilities = $8,550

Equity = Assets - Liability

Equity at Beginning : $24,750 -$8,550 = $16,200

Equity at End : ($24,750 - $3,550) - ($8,550+$2,850)

= $21,200 - $11,400

= $9,800

Change in Stock holder's Equity : $16,200 -$9,800

= $6,400(Decrease)