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30 March, 01:48

The stockholders' equity of Gorsky Company at the beginning and end of 2018 totaled $ 125,000 and $ 131,000 , respectively. Assets at the beginning of 2018 were $ 145,000. 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.

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  1. 30 March, 05:00
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    The assets at the end of 2018 will be for 222,000

    Explanation:

    We solve using the accounting equation:

    Assets = Liabilities + Equity

    2017

    Equity 125,000

    Assets 145,000

    Assets = Liabilities + Equity

    145,000 = Liabilities + 125,000

    145,000 - 125,000 = Liabilities

    Liaiblities = 20,000

    2018

    Equity 131,000

    "Liabilities increase by 71,000"

    Liabilities = 2017 + increase = 20,000 + 71,000 = 91,000

    Assets = Liabilities + Equity

    Assets = 91,000 + 131,000 = 222,000
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