Question

Stockholders' equity at the beginning of the year for ATLAS Inc. was $390,000, while its liabilities totaled $230,000. During the year its assets increased by $75,000; its liabilities decreased by $50,000. Which of these is stockholders' equity at the end of the year for ATLAS Inc.? a.$107,000 b.$98,000 c.$515,000 d.$415,000

Answer 1

Answer:

c. 515,000

Explanation:

Accountable Equation:

Assets = Liabilities + Stockholders' equity

With equation lets first find out Assets at the beginning of the year:

Assets = Liabilities + Stockholders' equity

Assets = 230,000 + 390,000

Assets = 620,000

Now, according to their increased and decreased, we can calculate Assets and Liabilities final balance.

Assets = 620,000 + 75,000 = 695,000

Liabilities = 230,000 - 50,000 = 180,000

And clearing from the accountable formula Stockholders' equity  we can get the result to the question:

Assets = Liabilities + Stockholders' equity

Stockholders' equity  = Assets - Liabilities

Stockholders' equity = 695,000 - 180,000

Stockholders' equity = 515,000