Question

Determine the following:_______

a. The stockholders' equity of a company that has assets of $451,000 and liabilities of $327,000.
b. The retained earnings of a company that has assets of $619,000, liabilities of $226,000 and common stock of $166,000.
c. The assets of a corporation that has liabilities of $401,000, common stock of $201,000 and retained earnings of 186,000.

Answer 1

a.

Total Stockholders' equity = $124000

b.

Retained earnings = $227000

c.

Total assets = $788000

Step-by-step explanation:

a.

The basic accounting equation states that the value of total assets is always equal to the sum of the values of total liabilities and total stockholders' equity.

Total assets = Total liabilities + Total Stockholders' equity

451000 = 327000 + Total Stockholders' equity

Total Stockholders' equity = 451000 - 327000

Total Stockholders' equity = $124000

b.

The total stockholders' equity section of a company can be further divided into two components namely common stock and retained earnings. Thus, the basic accounting equation can be rewritten as,

Total assets = Total liabilities + Common Stock + Retained earnings

787619000 = 226000 + 166000 + Retained earnings

Retained earnings = 619000 - 392000

Retained earnings = $227000

c.

Total assets = Total liabilities + Common Stock + Retained earnings

Total assets = 401000 + 201000 + 186000

Total assets = $788000