Stockholders' equity and total assets were $32,000 and $79,000 respectively at the beginning of the period. Assets increased 50% and liabilities decreased 60% during the period.
What is stockholders' equity at the end of the period?

Question

Quizplus · Accepted Answer

Assets increased by 50%, so the new total assets are $79,000 * 1.50 = $118,500. Liabilities decreased by 60%, so the new total liabilities are $79,000 - ($79,000 * 0.60) = $31,600. Stockholders' equity is equal to total assets minus total liabilities, so the new stockholders' equity is $118,500 - $31,600 = $86,900.

Stockholders' Equity and Total Assets Were $32,000 and $79,000 Respectively