On January 1,2017,total assets for Liftoff Technologies were $125,000; on December 31,2017,total assets were $145,000.On January 1,2017,total liabilities were $110,000; on December 31,2017,total liabilities were $115,000.What are the amount of the change and the direction of the change in Liftoff Technologies shareholders' equity for 2017?

Question

Quizplus · Accepted Answer

Shareholders' equity is calculated as the difference between total assets and total liabilities. Therefore, on January 1, 2017, shareholders' equity was $15,000 ($125,000 - $110,000), and on December 31, 2017, shareholders' equity was $30,000 ($145,000 - $115,000). The change in shareholders' equity is the difference between the two, which is an increase of $15,000. Therefore, the correct answer is B: increase of $15,000.

On January 1,2017,total Assets for Liftoff Technologies Were $125,000; on December