A company reported total equity of $177,000 at the beginning of the year. The company reported $242,000 in revenues and $181,000 in expenses for the year. There were no stockholder investments or dividends during the year. Liabilities at the end of the year totaled $108,000. What are the total assets of the company at the end of the year?

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Business

Shady

9 November, 00:44

A company reported total equity of $177,000 at the beginning of the year. The company reported $242,000 in revenues and $181,000 in expenses for the year. There were no stockholder investments or dividends during the year. Liabilities at the end of the year totaled $108,000. What are the total assets of the company at the end of the year?

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Gregory Velez · Answer 1

Total assets at the end of the year = $346000

Explanation:

The accounting equation as we all know is,

Assets = Liabilities + Equity

The equity at the start of the year is reported as 177000.

We need to calculate the assets at the end of the year. For that, we need Equity at the end of the year. The only chanage to equity till the end of the year is the addition of profit.

Profit = Revenue - Expenses = 242000 - 181000 = 61000

Thus, equity at the end of the year = 177000 + 61000 = 238000

Thus Assets at the end of the year are,

Assets = 108000 + 238000

Assets = $346000