On January 1, 2010, total assets for Liftoff Technologies were $125,000; on December 31, 2010, total assets were $145,000. On January 1, 2010, total liabilities were $110,000; on December 31, 2010, total liabilities were $115,000. What is the amount of the change and the direction of the change in Liftoff Technologies' stockholders' equity for 2010?
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 is calculated as the change in assets minus the change in liabilities. Assets increased by $20,000 ($145,000 - $125,000) and liabilities increased by $5,000 ($115,000 - $110,000). Therefore, stockholders' equity increased by $15,000 ($20,000 - $5,000).

On January 1, 2010, Total Assets for Liftoff Technologies Were