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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 1-563 Applying the Fundamental Accounting Equation

At the beginning of 2019, KJ Corporation had total assets of $525,100, total liabilities of $290,800. common stock of $100000. and retained earnings of $134,900. During 2019. KJ had net income of $205,500. paid dividends of $70,000. and 1ssued additional common stock for $36,000 KJ’s total assets at the end of 2019 were $10,100.

Required:

Calculate the amount of Liabilities that KJ must have at the end of 2019 in 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 KJ Corporation.

Explanation

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

    KJ Corporation
    For the Year 2019:
    Beginning Balance of Retained earnings $ 134,900
    Add: Net income $ 205,500
    Less: Dividends ...

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