Basic accounting equation (Learning Objective 5 ) 10–15 min.

Burnt Finger Restaurant had $84,000 of total assets and $56,000 of total stockholders’

equity at July 31, 2014. At July 31, 2015, Burnt Finger Restaurant had assets totaling

$153,000 and stockholders’ equity totaling $91,000.

After analyzing the data, answer the following questions:

1. What was the amount of the increase or decrease in liabilities?

2. Identify a possible reason for the change in liabilities during the year.

AppendixLO1