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The Accounting Equation
Problem: For the following four cases, use the accounting equation to compute the missing quantity.
Note: I was given four cases but apparently I am missing something. For example the first case states: $20,000 assets, $8,000 liabilities, and $3,500 in Retained Earnings. Find the Capital stock. I know that assets = liabilities plus owner's equity. So would I subtract $11,500 from $20,000? How would I know how to find the capital stock? In the other problems I would have to find the assets, libiabilties, or retained earnings. |
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20000-(8000+3500) = Rs8500 will b the capital stock
Capital stock,retained earnings and liabilities are to b shown in liabiliy side of balance sheet and assets on assets side... so the diff figure i.e assets-(liabilities+retained earnings) = capital stock if u need further help I'll b glad 2 help u |
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