Question

Suppose a company has no transactions with its owners during 20X0. That is, paid-in capital remains unchanged, and retained earnings increases by the entire amount of the net income. During 20X0 the company’s net income is $50,000. At the beginning of the year, the company’s balance sheet equation was as follows:
assets = liabilities + stockholders’ equity
$450,000 = $200,000 + $250,000

What do you know about the balance sheet equation at the end of 20X0?



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  • CreatedNovember 19, 2014
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