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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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Problem 1-56A Applying the Fundamental Accounting Equation

At the beginning of 2019 Huffer Corporation had total assets of $232,400 total liabilities of $94,200 common stock of 5501000. and retained earnings of $88,200. During 2019, Huffer had net income of $51,1501 paid dividends of 510,000. and issued additional common stock for $15,000. Huffer’s total assets at the end 01'2019 were $285,500.

Required:

Calculate the amount of liabilities that Huffer must have at the end of 2019 m order for the balance sheet equation to balance.

To determine

Accounting equation:

Accounting equation represents the mathematical relationship between assets, liabilities and equity. According to this equation, assets are equal to the sum of liabilities and equity. The formal for basic accounting equation is as follows:

  Assets = Liabilities + Equity

To Calculate:

The amount of Liabilities at the end of 2019 for Huffer Corporation.

Explanation

The amount of Liabilities at the end of 2019 for Huffer Corporation is calculated as follows:

    Huffer Corporation
    For the Year 2019:
    Beginning Balance of Retained earnings $ 88,200
    Add: Net income $ 51,750
    Less: Dividends

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