Chapter 1, Problem 1.2BPE

(a)

To determine

Accounting equation

Accounting equation is an accounting tool expressed in the form of equation, by creating a relation between resources or assets of a company and claims of resources by creditors and owners. Accounting equation is expressed as shown below:

$\text{Assets = Liabilities + Stockholder’s Equity}$

To solve: For stockholder’s equity as of December 31, 2015, using accounting equation

(b)

To determine

To solve: For stockholder’s equity as of December 31, 2016, using accounting equation