Understanding Financial Statements: Changes in Assets, Liabilities, and Equity
Analyzing Changes in Total Assets, Liabilities, and Equity
When examining a company's financial statements, it is important to understand how changes in liabilities and stockholders' equity impact the total assets of the business. In this case, if total liabilities increased by $77,000 and stockholders' equity decreased by $43,500 during a specific period, we can determine the change in total assets for that period.
Assets = Liabilities + Equity
In this scenario:
- Liabilities increased by $77,000 - Stockholders' equity decreased by $43,500The Calculation:
To find the change in total assets, we need to subtract the decrease in equity from the increase in liabilities:
Difference = $77,000 - $43,500
= $33,500
Conclusion:
Therefore, the amount and direction of the period's change in total assets is: Assets increased by $33,500.
If total liabilities increased by $77,000 during a period of time and stockholders' equity decreased by $43,500 during the same period, then the amount and direction (increase or decrease) of the period's change in total assets is a(n): Answer: Assets increased by $33,500