Question

The stockholders' equity of Gorsky Company at the beginning and end of 2018 totaled $124,000 and $130,000, respectively. Assets at the beginning of 2018 were $147,000. If the liabilities of Gorsky Company increased by $71,000 in 2018, how much were total assets at the end of 2018? Use the accounting equation

Answer 1

Answer:

The answer is: The total assets of Gorsky Company at 31-12-2018 are $224,000

Explanation:

To calculate total assets using a balance sheet you use the following formula:

                       Assets = Liabilities + Owner's Equity

Gorsky Company has the following data:

                                                       1-1-2018                             12-31-2018

Equity                                             $124,000                          $130,000

Assets                                            $147,000                           unknown

Liabilities                                            L                                    L + $71,000

To find out the total assets at 31-12-2018 we must first calculate the liabilities:

liabilities (1-1-2018) = $147,000 - $124,000 = $23,000

liabilities (31-12-2018) = $23,000 + $71,000 = $94,000

We can now calculate the total assets at 31-12-2018:

assets = $94,000 + $130,000 = $224,000