The assets of ALS Ltd increased by $5476 during year ended 30 June 2012 and during the same period liabilities decreased by $3019.Consequently shareholders' equity must have:
A) increased by $2457
B) increased by $8495
C) decreased by $2457
D) decreased by $8495.

Question

Quizplus · Accepted Answer

Shareholders' equity can be calculated using the following formula:
Shareholders' equity = Total assets - Total liabilities

Based on the information provided in the question, we know that:
Assets increased by $5476
Liabilities decreased by $3019

Therefore, we can calculate the change in shareholders' equity as follows:

Change in shareholders' equity = Change in assets - Change in liabilities
Change in shareholders' equity = $5476 - (-$3019)
Change in shareholders' equity = $5476 + $3019
Change in shareholders' equity = $8495

Since the change in shareholders' equity is positive, it means that shareholders' equity increased by $8495. Therefore, the correct answer is B) increased by $8495.

The Assets of ALS Ltd Increased by $5476 During Year