Sawaddee Enterprises began the year with total assets of $450,000 and total liabilities of $230,000.If Sawaddee total liabilities increased by $31,000 and its owners' equity decreased by $53,000 during the year, what was the amount of its total assets at the end of the year?
A) $472,000
B) $242,000
C) $198,000
D) $428,000

Question

Quizplus · Accepted Answer

The accounting equation is Assets = Liabilities + Owners' Equity. Initially, Owners' Equity = $450,000 - $230,000 = $220,000. During the year, Liabilities increased by $31,000 and Owners' Equity decreased by $53,000. New Liabilities = $230,000 + $31,000 = $261,000. New Owners' Equity = $220,000 - $53,000 = $167,000. Therefore, new Assets = $261,000 + $167,000 = $428,000.

Sawaddee Enterprises Began the Year with Total Assets of $450,000