Question 10 1 / 1 pts The shareholders' equity of Diakovsky Company at the beginning and end of 20X6 totaled $16,000 and $21,000, respectively. Assets at the beginning of 20X6 were $25,000. If Diakovsky Company's liabilities increased by $8,000 in 20X6, how much were total assets at the end of 20X6

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23 July, 21:39

Question 10 1 / 1 pts The shareholders' equity of Diakovsky Company at the beginning and end of 20X6 totaled $16,000 and $21,000, respectively. Assets at the beginning of 20X6 were $25,000. If Diakovsky Company's liabilities increased by $8,000 in 20X6, how much were total assets at the end of 20X6

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Emmett Dougherty · Answer 1

The total assets amounts to $38,000 at the end of the year 20X6

Explanation:

Computing the beginning liabilities of the company by using the accounting equation as:

Assets = Liabilities + Shareholders' Equity

where

Beginning assets amounts to $25,000

Beginning shareholders' equity amounts to $16,000

Putting the values above:

$25,000 = Liabilities + $16,000

$25,000 - $16,000 = Liabilities

Liabilities = $9,000

So, beginning liability amounts to $9,000

Now, computing the ending assets by using the accounting equation as:

Assets = Liabilities + Shareholders' Equity

where

Ending shareholders' equity amounts to $21,000

Ending liabilities amounts to $17,000 as ending liability increase by $8,000. So, $8,000 + $9,000 which equals to $17,000

Putting the values above:

= $17,000 + $21,000

= $38,000

Therefore, ending assets amounts to $38,000