Basic accounting equation (Learning Objective 5) 5–10 min.

At the beginning of the year, Shanon Company had total assets of $550,000 and total liabilities of $210,000. Answer the following questions viewing each situation as being independent of the others.

1. If total assets increased by $200,000 during the year, and total liabilities decreased by $75,000, what is the amount of Stockholder’s equity at the end of the year?

2. During the year, total liabilities increased by $230,000 and stockholder’s equity decreased by $90,000. What is the amount of total assets at the end of the year?

3. If total assets decreased by $40,000 and stockholder’s equity increased by $130,000 during the year, what is the amount of total liabilities at the end of the year?

AppendixLO1