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    whokitty's Avatar
    whokitty Posts: 1, Reputation: 1
    New Member

    Aug 28, 2010, 05:08 AM
    How to determine total liabilities at the end of the year in accounting
    Total assets $120,00, Stockholdedrs' equity is $40,000, during the year income earned is $90,000, and paid $20,000 in dividends. Total assets at the end of the year were $215,000. What was the total liabilities at the end of the year?
    bendingleconte's Avatar
    bendingleconte Posts: 112, Reputation: 9
    Junior Member

    Aug 28, 2010, 07:30 AM

    Assets = Liab. + SEquity
    Therefore, Liab. = Assets - SEquity

    First find Stockholder Equity for end of year.

    $40,000 SE (beginning)
    +90,000 Net Income
    -20,000 Dividends
    = $110,000 SEquity (end of year)

    Assets ($215,000) = Liab. (X) - SEquity ($110,000)

    Liab. (X) = ($215,000) - ($110,000)

    Liabilities = $105,000
    bendingleconte's Avatar
    bendingleconte Posts: 112, Reputation: 9
    Junior Member

    Aug 28, 2010, 07:33 AM

    Oh, and please post in the Homework link going forward. ;)

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