Maxine's Bakery recorded $220,000 in revenues, $165,000 in expenses, and $30,000 of dividends for the year.The company began the year with total assets of $190,000 and stockholder's equity of $87,000.
-Use the information above to answer the following question.Suppose that liabilities increased by $60,000 and stockholders' equity increased by $25,000.What would be the change in Maxine's assets?

Question

Quizplus · Accepted Answer

The change in assets is equal to the change in liabilities plus the change in stockholders' equity. Therefore, the change in assets is $60,000 (increase in liabilities) + $25,000 (increase in stockholders' equity) = $85,000 increase.

Maxine's Bakery Recorded $220,000 in Revenues, $165,000 in Expenses, and $30,000