G The shareholders' equity of Diakovsky Company at the beginning and end of 20X6 totaled $16,000 and $21,000, respectively. Assets at the beginning of 20X6 were $25,000. If Diakovsky Company's liabilities increased by $8,000 in 20X6, how much were total assets at the end of 20X6
Explanation:
there is one equation which accounting is based
Assets = Equity+Liability
Opening Assets = Opening Equity+Opening Laibility
25000 = 16000+9000
9000 is the balancing figure because at that amount equation will be telly
Closing Equation as follows
Closing Assets = Closing Equity+Closing Laiblity
? = 21000+9000 opening + 8000 increase
? = 21000+17000
Closing Assets should be = 38000
Total Assets At closing Date 38000
The total assets amounts to $38,000 at the end of the year 20X6
Explanation:
Computing the beginning liabilities of the company by using the accounting equation as:
Assets = Liabilities + Shareholders' Equity
where
Beginning assets amounts to $25,000
Beginning shareholders' equity amounts to $16,000
Putting the values above:
$25,000 = Liabilities + $16,000
$25,000 - $16,000 = Liabilities
Liabilities = $9,000
So, beginning liability amounts to $9,000
Now, computing the ending assets by using the accounting equation as:
Assets = Liabilities + Shareholders' Equity
where
Ending shareholders' equity amounts to $21,000
Ending liabilities amounts to $17,000 as ending liability increase by $8,000. So, $8,000 + $9,000 which equals to $17,000
Putting the values above:
= $17,000 + $21,000
= $38,000
Therefore, ending assets amounts to $38,000
$38,000
Explanation:
The accounting equation shows the relationship between the various elements of the balance sheet which are assets, liabilities and equity. The equation is as shown below;
Assets = Liabilities + Equity
At the beginning of 20x6
$25,000 = liabilities + $16,000
Liabilities = $25,000 - $16,000
= $9,000
If liabilities increases by $8,000
At the end of 20x6,
Liabilities = $9,000 + $8,000
= $17,000
Total Assets = $17,000 + $21,000
= $38,000