Chapter 1, Problem 1.9BE

(a)

To determine

Accounting Equation: It is the mathematical equation that shows the relation between assets, liabilities and stockholders’ equity. It shows that assets balances the liabilities / stockholders’ equity.  It is expressed as:

Accounting Equation

Figure (1)

To Determine: The amount of stockholders’ equity at the end of the year. Follow the below equation to determine the value of stockholders’’ equity:

$\text{Stockholders’ Equity}\text{=}\text{Assets}-\text{Liabilities}$

(b)

To determine

The amount of total assets at the end of the year. Follow the below equation to determine the value of assets:

$\text{Assets}=\text{Stockholders’ Equity}+\text{Liabilities}$

(c)

To determine

The amount of total liabilities at the end of the year. Follow the below equation to determine the value of liabilities:

$\text{Liabilities}=\text{Assets}-\text{Stockholders’ Equity}$