Inspirational Inc. is a motivational consulting business. At the end of its accounting period, October 31, 20Y2, Inspirational has assets of $5,250,000 and liabilities of $1,600,000. Using the accounting equation and considering each case independently, determine the following amounts: a. Stockholders' equity as of October 31, 20Y2. $ 3,650,000 b. Stockholders’ equity as of October 31, 20Y3, assuming that assets increased by $800,000 and liabilities increased by $330,000 during 20Y3. $ 4,120,000 c. Stockholders' equity as of October 31, 20Y3, assuming that assets decreased by $600,000 and liabilities increased by $140,000 during 20Y3. $ 2,910,000 d. Stockholders' equity as of October 31, 20Y3, assuming that assets increased by $440,000 and liabilities decreased by $90,000 during 20Y3. $ 4,180,000 e. Net income (or net loss) during 20Y3, assuming that as of October 31, 20Y3, assets were $6,140,000, liabilities were $1,950,000, and no additional common stock was issued or dividends paid. Net income $

a.Stockholders equity as at October 31, 20Y2.

       Equity = $3,650,000

b. Stockholders equity as at October 31, 20Y3

        Equity = $4,120,000

c. Stockholders equity as at October 31, 20Y3.

     Equity = $2,910,000

d.Stockholders equity as at October 31, 20Y3.

      Equity = $4,180,000

e. Net Income as at October 2OY3

         Net Income = $540,000

Explanation:

Accounting equation equate asset with liabilities and equity:

Assets = Liaibilities + Equity.

With this formula, any of the missing value can be derived mathematically.

To get equity, the item will be rearranged as follows:

Equity = Asset - Liabilities

a. Stockholders equity as at October 31, 20Y2.

Equity = $5,250,000   - $1,600,000

Equity = $3,650,000

b. Stockholders equity as at October 31, 20Y3

Increase in asset of $800,000 and increase in liabilities of $330,000

Equity = ($5,250,000 +$800,000) - ($1,600,000 + $330,000)

Equity = $6,050,000  - $1,930,000

Equity = $4,120,000

c. Stockholders equity as at October 31, 20Y3.

Assuming that assets decreased by $600,000 and liabilities increased by $140,000

Equity =( $5,250,000 - $600,000)  - ($1,600,000 + $140,000)

Equity = $4,650,000 - $1,740,000

Equity = $2,910,000

d. Stockholders equity as at October 31, 20Y3.

assuming that assets increased by $440,000 and liabilities decreased by $90,000

Equity = ($5,250,000+$440,000)  - ($1,600,000 -$90,000)

Equity = $5,690,000 - $1,510,000

Equity = $4,180,000

e. Net Income as at October 2OY3

Net income (or net loss) during 20Y3, assuming that as of October 31, 20Y3, assets were $6,140,000, liabilities were $1,950,000, and no additional common stock was issued or dividends paid

Net income = Closing equity  - opening equity.

Closing equity:

                     = $6,140,000 - $1,950,000

                      = $4,190,000

Opening equity as at October 31, 20Y2 = $3,650,000

Net Income = $4,190,000 -$3,650,000

Net Income = $540,000

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