Chapter 1, Problem 15CE

Cornerstone Exercise 1-15

Using the Accounting Equation

At the beginning of the year, Morgan Company had total assets of $\$\text{425},000$

and total liabilities of $\$\text{26}0,000$.

Required:

Use the fundamental accounting equation to answer the following independent questions:

1. What is total stockholders' equity at the beginning of the year?
2. If, during the year, total assets increased by $73,000 and total liabilities increased by $32,000, what is the amount of total stockholders' equity at the end of the year?
3. If, during the year, total assets decreased by $52,000 and total stockholders' equity increased by $35,000, what is the amount of total liabilities at the end of the year?
4. If, during the year, total liabilities increased by $85,000 and total stockholders' equity decreased by $73,000, what is the amount of total assets at the end of the year?