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2 May, 04:52

Brief exercise 1-9 at the beginning of the year, morales company had total assets of $816,000 and total liabilities of $526,000. (treat each item independently.) (a) if total assets increased $178,000 during the year and total liabilities decreased $82,000, what is the amount of stockholders' equity at the end of the year?

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  1. 2 May, 06:01
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    Calculation of amount of stockholders' equity at the end of the year:

    At the beginning of the year, Morales Company had total assets of $816,000 and total assets increased $178,000 during the year, hence Total Assets at the end of the year shall be 816000+178000 = $994,000

    At the beginning of the year, Morales Company had total liabilities of $526,000 and total liabilities decreased $82,000 during the year. Hence Total Liabilities at the end of the year shall be 526000-82000 = $444,000

    Now we can calculate amount of stockholders' equity at the end of the year as follows:

    Equity = Assets - Liabilities

    = 994,000-444,000

    = $550,000

    Hence, the amount of stockholders' equity at the end of the year shall be $550,000
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