At the Beginning of 2014, Bonds Company Had Total Assets

question 11

Essay

At the beginning of 2014, Bonds Company had total assets of $650,000 and total liabilities of $370,000. Answer each of the following questions.
1. If total assets increased $60,000 and equity decreased $90,000 during the year, determine the amount of total liabilities at the end of the year.
2. During the year, total liabilities decreased $75,000 and equity increased $50,000. Compute the amount of total assets at the end of the year.
3. If total assets decreased $100,000 and total liabilities increased $55,000 during the year, determine the amount of equity at the end of the year.

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Definitions:

Statement Of Financial Position

A financial statement that provides a snapshot of a company's assets, liabilities, and shareholders' equity at a specific point in time, also known as a balance sheet.

IFRS 3

An International Financial Reporting Standard that deals with the accounting treatment for all business combinations.

Business Combinations

Transactions or events in which one entity gains control over one or more other businesses, often resulting in consolidations or acquisitions.

Parent-Company Method

An accounting approach where the parent company reports its investment in subsidiaries at cost, often used in separate financial statements.