Beginning assets were $700,000,beginning equity was $225,000,revenue for the year was $523,000,common stock issued during the year totaled $320,000,expenses for the year were $392,000,ending equity was $751,000,and ending assets were $963,000. What are the ending liabilities for the year?

Question

Quizplus · Accepted Answer

We can use the accounting equation: Assets = Liabilities + Equity

From the information given:
Beginning assets = $700,000
Beginning equity = $225,000
Revenue for the year = $523,000
Common stock issued during the year = $320,000
Expenses for the year = $392,000
Ending equity = $751,000
Ending assets = $963,000

We can calculate the change in equity as follows:
Beginning equity + Revenue - Expenses + Common stock issued = Ending equity
$225,000 + $523,000 - $392,000 + $320,000 = $751,000
Simplifying: $676,000 + $320,000 = $751,000
$996,000 = $751,000
Therefore, the change in equity for the year was $526,000.

We can now use the accounting equation to calculate the ending liabilities:
Assets = Liabilities + Equity
$963,000 = Liabilities + $751,000
Liabilities = $963,000 - $751,000
Liabilities = $212,000

Therefore, the ending liabilities for the year were $212,000. So, the best choice is C.

Beginning Assets Were $700,000,beginning Equity Was $225,000,revenue for the Year