Question

Ending assets for CompuHelp equal $650,000 and the beginning retained earnings account was $325,000. If net income during the period was $225,000 and dividends were $150,000, what were ending liabilities

Answer 1

Answer:

$250,000

Explanation:

The computation of the ending liabilities is shown below:

As we know that

Total assets = Total liabilities + stockholder equity

where,

Ending retained earnings = Opening retained earning + net income - dividend paid

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

= $400,000

Now the ending liabilities is

= $650,000 - $400,000

= $250,000