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    Bmcarretta's Avatar
    Bmcarretta Posts: 8, Reputation: 1
    New Member
    		  
    #1

    Sep 1, 2013, 10:23 PM
    Accounting
    Assets $ 84,630
    Liabilities ?
    December 31, 2011
    Assets 93,840
    Liabilities 74,133
    During year 2011
    Stock issuances 6,500
    Net income (loss) 7,281
    Cash dividends 11,000


    - Calculate the amount of liabilities for Company E on December 31, 2010
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
    Ultra Member
    		  
    #2

    Sep 2, 2013, 07:13 AM
    First you have to find 2011 equity. Your formula is:

    Equity = Assets - Liabilities

    Now you can find 2010 equity. Your formula is:

    Ending Equity = Beginning Equity + Stock Issuances + Net Income - Cash Dividends
    Rewritten as:
    Beginning Equity(2010) = Ending Equity(2011) - Stock Issuances - Net Income + Cash Dividends

    Now you can solve for 2010 Liabilities. Your formula is:
    Liabilities (2010) = Assets (2010) - Equity (2010)
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