On January 1,2015,total assets for Wininger Technologies were $135,000; on December 31,2015,total assets were $155,000.On January 1,2015,total liabilities were $110,000; on December 31,2015,total liabilities were $115,000.What is the amount of the change and the direction of the change in Wininger Technologies' stockholders' equity for 2015?
A)Decrease of $15,000
B)Increase of $15,000
C)Increase of $30,000
D)Decrease of $30,000

Question

Quizplus · Accepted Answer

The change in stockholders' equity can be calculated by using the accounting equation:

Assets = Liabilities + Stockholders' Equity

On January 1, 2015: 
Stockholders' Equity = Assets - Liabilities 
Stockholders' Equity = $135,000 - $110,000 
Stockholders' Equity = $25,000

On December 31, 2015: 
Stockholders' Equity = Assets - Liabilities 
Stockholders' Equity = $155,000 - $115,000 
Stockholders' Equity = $40,000

The change in Stockholders' Equity for 2015 is:

Change in Stockholders' Equity = Ending Stockholders' Equity - Beginning Stockholders' Equity 
Change in Stockholders' Equity = $40,000 - $25,000 
Change in Stockholders' Equity = $15,000

Since there is an increase in stockholders' equity, the answer is B) Increase of $15,000.

On January 1,2015,total Assets for Wininger Technologies Were $135,000; on December