Chapter 1, Problem 1.8BE

(a)

To determine

Basic accounting equation

Basic accounting equation refers to the relationship that exist among the primary constituents of balance sheet, those are the assets, the liabilities and the stockholders’ equities, depicted in the form of the mathematical equation. The accounting equation remains always in balance. It is also known as balance sheet equation.

The below figure represents the basic accounting equation:

Figure (1)

To calculate: The amount of Company L’s total assets.

(b)

To determine

To calculate: The amount of Company S’s total liabilities.

(c)

To determine

To calculate: The amount of Company B’s stockholders’ equity.