A company began the year with assets of $100,000,liabilities of $20,000,and stockholders' equity of $80,000.During the year assets increased $55,000 and stockholders' equity increased $20,000.What was the change in liabilities for the year?

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The accounting equation is Assets = Liabilities + Stockholders' Equity. Initially, $100,000 = $20,000 + $80,000. At the end of the year, assets are $155,000 ($100,000 + $55,000) and stockholders' equity is $100,000 ($80,000 + $20,000). Therefore, liabilities must be $55,000 ($155,000 - $100,000), an increase of $35,000 from the initial $20,000.

A Company Began the Year with Assets of $100,000,liabilities of $20,000,and