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# Question about Basic accounting equation

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BE1-3 At the beginning of the year, Gonzales Company had total assets of \$870,000 and total
liabilities of \$500,000. Answer the following questions.

(a) If total assets increased \$150,000 during the year and total liabilities decreased \$80,000,
what is the amount of stockholders' equity at the end of the year?

(b) During the year, total liabilities increased \$100,000 and stockholders' equity decreased
\$70,000.What is the amount of total assets at the end of the year?

(c) If total assets decreased \$80,000 and stockholders' equity increased \$120,000 during the
year, what is the amount of total liabilities at the end of the year?

Use basic accounting equation.
(SO 6) (Attached)

Use SO 7 (ATTACHED)
BE1-4 Presented below are three business transactions. On a sheet of paper, list the letters (a), (b), (c) with columns for assets, liabilities, and stockholders' equity. For each column, indicate whether the transactions increased (+), decreased (&#8722;), or had no effect (NE) on assets, liabilities, and stockholders' equity.

(a) Purchased supplies on account.
(b) Received cash for providing a service.
(c) Paid expenses in cash.

#### Solution Preview

BE1-3 At the beginning of the year, Gonzales Company had total assets of \$870,000 and total
liabilities of \$500,000. Answer the following questions.

(a) If total assets increased \$150,000 during the year and total liabilities decreased \$80,000,
what is the amount of stockholders' equity at the end of the year?

(b) During the year, total liabilities increased \$100,000 and stockholders' equity decreased
\$70,000.What is the amount of total assets at the end of the year?

(c) If total assets decreased \$80,000 and stockholders' equity increased \$120,000 during the
year, what is the amount of total liabilities at the end of the year? ...

#### Solution Summary

Response gives the guidance to prepare the basic accounting equation

\$2.19