CH.1 Accounting In Action PSSG

Question 1

The total assets of Mitzer Corporation at December 31, 2008 are $380,000 and its total liabilities are $150,000 at that same date.

Q. What is the amount of Mitzer Corporation’s total stockholders’ equity at December 31, 2008?

Answer 1

Assets = Liabilities + Stockholders’ Equity
$380,000 = $150,000 + SE
$380,000 - $150,000 = SE
$230,000 = Stockholders’ Equity

Assets = Liabilities + Stockholders' Equity
$380,000 = $150,000 + $230,000

Question 2

The total assets of Heidi Corporation are $400,000 at December 31, 2008, and its total stockholders’ equity is $280,000 at the same date.

Q. What is the amount of Heidi Corporation’s total liabilities at December 31, 2008?

Answer 2

Assets = Liabilities + Stockholders’ Equity
$400,000 = L + $280,000
$400,000 - $280,000 = L
$120,000 = Liabilities

Assets = Liabilities + Stockholders' Equity
$400,000 = $120,000 + $280,000

Question 3

The total liabilities of Aaron Corporation are $128,000 at December 31, 2008. Total stockholders’ equity for the company is $220,000 at that same date.

Q. What is the amount of total assets for the corporation at December 31, 2008?

Answer 3

Assets = Liabilities + Stockholders' Equity
A = $128,000 + $220,000
Assets = $348,000

Assets = Liabilities + Stockholders' Equity
$348,000 = $128,000 + $220,000

Question 4

The total liabilities of Malcohm Corporation are $80,000. The total assets of the company are three times the amount of its total liabilities.

Q. What is the amount of Malcohm Corporation’s total stockholders’ equity?

Answer 4

Assets = Liabilities + Stockholders' Equity
3(L) = $80,000 + SE
3 (80,000) = $240,000
$240,000 = $80,000 + SE
$240,000 - $80,000 = SE
$160,000 = Stockholders' Equity

Assets = Liabilities + Stockholders' Equity
$240,000 = $80,000 + $160,000

Question 5

At January 1, 2008, Molly Corporation had total assets of $600,000 and total liabilities of $340,000. During the calendar year of 2008, total assets increased $80,000, and total liabilities decreased $30,000.
Q1. What was the change in stockholders’ equity during 2008?

Q2. What was the amount of stockholders’ equity at December 31, 2008?

Answer 5

A1. ^Assets = ^Liabilities + ^Stockholders’ Equity
👆$80,000 = 👇$30,000 + ^SE
👆$80,000 + 👆$30,000 = ^SE
👆$110,000 = ^SE

A2. Assets = Liabilities + Stockholders’ Equity
$680,000 = $310,000 + SE
$680,000 - $310,000 = SE
$370,000 = Stockholders’ Equity

   Assets = Liabilities + Stockholders' Equity
  $680,000 = $310,000 + $370,000

Question 6

At January 1, 2008, Backford Corporation had total assets of $500,000 and total stockholders’ equity of $280,000. During 2008, total assets decreased $40,000, and total liabilities decreased $22,000.

Q1. What was the amount of total liabilities at January 1, 2008?

Q2. What was the change during 2008 in total stockholders’ equity?

Q3. What was the total stockholders’ equity at December 31, 2008?

Answer 6

A1. Assets = Liabilities + Stockholders’ Equity
$500,000 = L + $280,000
$500,000 - $280,000 = L
$220,000 = Liabilities at January 1, 2008

   $500,000 = $220,000 + $280,000

A2. ^Assets = ^Liabilities + ^Stockholders’ Equity
👇$40,000 = 👇$22,000 + ^SE
👇$40,000 + 👇$22,000 = ^SE
👇$62,000 = ^SE

A3. Assets = Liabilities + Stockholders’ Equity
$460,000 = $198,000 + SE
$460,000 - $198,000 = SE
$262,000 = Stockholders’ Equity at December 31, 2008

   Assets = Liabilities + Stockholders' Equity
   $460,000 = $198,000 + $262,000