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31 December, 11:14

Emmitt had the following final balances after the first year of operations: assets, $35,100; stockholders' equity, $13,500; dividends, $3,500; and net income, $10,000. What is the amount of Emmitt's liabilities?

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  1. 31 December, 14:34
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    Liabilities = 331,100

    Explanation:

    Using the accounting equation we can solve for liabilities

    assets = liabilities + equity

    We have to solve for Equity first:

    SE 13,500

    net income 10,000

    dividends (3,500)

    Total Equity 20,000

    assets 351,100

    Next we post this know value on the formula and solve for liab:

    Assets = Liablities + Equity

    351,100 = Liab + 20,000

    351,100 - 20,000 = Liab

    Liabilities = 331,100
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