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I get why we subtracted 25K from the liabilities side, but I'm not sure what told me to add 25K to both sides. Accounting equation
I get why we subtracted 25K from the liabilities side, but I'm not sure what told me to add 25K to both sides.
Accounting equation You're A Star is a motivational consulting business. At the end of its accounting period, December 31, Year 1, You're A Star has assets of $800,000 and liabilities of $350,000. Using the accounting equation, determine the following amounts: B. Stockholders' equity as of December 31, Year 2, assuming that assets increased by $130,000 and liabilities decreased by $25,000 during Year 2. Stockholders' Equity as of December 31, Year 1 = $450,000 Assets = Liabilities + Stockholders' Equity $130.000 - - $25,000+ Stockholders Equity $130,000 + $25,000-$25,004 + $25,000 Stockholders' Equity Change in Stockholders' Equity = $155,000 $450 $155,000 Beginning balance as of December 31, Year 1 Plus increases Less decreases Ending balance as of December 31, Year 2 155,000Step by Step Solution
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