Corporate Financial Accounting 14th Edition by Carl Warren,James Reeve,Jonathan Duchac

Exercise 49

Accounting equation
Inspirational Inc. is a motivational consulting business. At the end of its accounting period, October 31, 2017, Inspirational has assets of $5,250,000 and liabilities of $1,600,000. Using the accounting equation and considering each case independently, determine the following amounts:
A. Stockholders' equity as of October 31, 2017.
B. Stockholders' equity as of October 31, 2018, assuming that assets increased by $800,000 and liabilities increased by $330,000 during 2018.
C. Stockholders' equity as of October 31, 2018, assuming that assets decreased by $600,000 and liabilities increased by $140,000 during 2018.
D. Stockholders' equity as of October 31, 2018, assuming that assets increased by $440,000 and liabilities decreased by $90,000 during 2018.
E. Net income (or net loss) during 2018, assuming that as of October 31,2018, assets were $6,140,000, liabilities were $1,950,000, and no additional common stock was issued or dividends paid.