At the beginning of the year Washington had a total assets of $300,000 and a total liabilitiesof $120,000. If total assets increased $150,000 during the year and total liabilities decreased $25,000. What is the amount of stockholders equity at the end of the year?
To find the amount of stockholders' equity at the end of the year, we need to calculate the difference between the total assets and the total liabilities.
Step 1: Calculate the total assets at the end of the year.
Begin with the initial total assets: $300,000
Add the increase in total assets during the year: +$150,000
Total assets at the end of the year = $300,000 + $150,000 = $450,000
Step 2: Calculate the total liabilities at the end of the year.
Begin with the initial total liabilities: $120,000
Subtract the decrease in total liabilities during the year: -$25,000
Total liabilities at the end of the year = $120,000 - $25,000 = $95,000
Step 3: Calculate the amount of stockholders' equity at the end of the year.
Stockholders' equity = Total assets - Total liabilities
Stockholders' equity = $450,000 - $95,000 = $355,000
Therefore, the amount of stockholders' equity at the end of the year is $355,000.