Question

Ending assets for CompuHelp equals $650,000, and the beginning retained earnings was $325,000. If net income during the period was $225,000 and the cash dividends paid total $150,000, what is the ending liabilities (assume common stock is zero)?Ending liabilities will be $250,000

Answer 1

Answer:

It is $250,000

Explanation:

Ending retained earning = Retained earnings at the beginning+Income during the period-dividends paid

= $325,000+$225,000-$150,000

= $400,000

Ending liabilities = Total Assets- Ending retained earnings

                           = $650,000-$400,000

                           =$250,000

Using Accounting equation, All Assets= Total equity and liabilities