Ballentine Company Ltd. has assets of $100,000, liabilities of $40,000, and shareholders’ equity of $60,000.
Required:
Refer to the basic accounting equation (Assets = Liabilities + Shareholders’ Equity) to answer each of the following independent questions:
a. At what amount will assets be stated if total liabilities decrease by $5,000 and shareholders’ equity remains unchanged?
b. Go back to the original data. At what amount will assets be stated if total liabilities increase by $3,000 and shareholders’ equity increases by $4,000?
c. Go back to the original data. At what amount will shareholders’ equity be stated if the company pays $7,000 of its liabilities?
d. Go back to the original data. At what amount will liabilities be stated if total assets decrease by $7,000 and shareholders’ equity increases by $2,000?
e. Go back to the original data. At what amount will shareholders’ equity be stated if the company declares a $1,000 dividend but does not pay it?