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10 April, 18:11

Crystal Lodging recorded $330,000 in revenues, $247,500 in expenses, and $45,000 of dividends for the year. The company began the year with total assets of $285,000 and stockholder's equity of $130,500. Suppose that liabilities increased by $90,000 and stockholders' equity increased by $37,500. What would be the change in Crystal Lodging's assets? Multiple Choice a.$168,000 Increase b.$127,500 increase c.$154,500 increase

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  1. 10 April, 19:50
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    b.$127,500 increase

    Explanation:

    Using Accounting Equation we can find thetotal increase in total assets:

    Assets = Equity + Liabilities

    Change in Assets = Change in Equity + Change in Liabilities

    Change in Assets = $37,500 + $90,000

    Change in Assets = $127,500

    Total Change in equity and liabilities will be equal to the change in Assets.

    So, the correct answer is b.$127,500 increase.
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