C is corrent. Mirr began operations on 1/1/Y1 with the following balance sheet elements:| Assets | = | Liabilities | + | Owners’ equity | | $860,000 | = | $110,000 | + | $750,000 |
During year 1, liabilities increased to $120,000, and owners’ equity increased to $765,000 [$750,000 beginning balance + $18,000 net income ($82,000 revenues − 64,000 expenses) − $3,000 dividends declared]. Therefore, 12/31/Y1 assets must be $885,000.| Assets | = | Liabilities | + | Owners’ equity | | $885,000 | = | $120,000 | + | $765,000 |
A is incorrect. Mirr began operations on 1/1/Y1 with the following balance sheet elements:| Assets | = | Liabilities | + | Owners’ equity | | $860,000 | = | $110,000 | + | $750,000 |
During year 1, liabilities increased to $120,000, and owners’ equity increased to $765,000 [$750,000 beginning balance + $18,000 net income ($82,000 revenues − 64,000 expenses) − $3,000 dividends declared]. Therefore, 12/31/Y1 assets must be $885,000.| Assets | = | Liabilities | + | Owners’ equity | | $885,000 | = | $120,000 | + | $765,000 |
B is incorrect. Mirr began operations on 1/1/Y1 with the following balance sheet elements:| Assets | = | Liabilities | + | Owners’ equity | | $860,000 | = | $110,000 | + | $750,000 |
During year 1, liabilities increased to $120,000, and owners’ equity increased to $765,000 [$750,000 beginning balance + $18,000 net income ($82,000 revenues − 64,000 expenses) − $3,000 dividends declared]. Therefore, 12/31/Y1 assets must be $885,000.| Assets | = | Liabilities | + | Owners’ equity | | $885,000 | = | $120,000 | + | $765,000 |
D is incorrect. Mirr began operations on 1/1/Y1 with the following balance sheet elements:| Assets | = | Liabilities | + | Owners’ equity | | $860,000 | = | $110,000 | + | $750,000 |
During year 1, liabilities increased to $120,000, and owners’ equity increased to $765,000 [$750,000 beginning balance + $18,000 net income ($82,000 revenues − 64,000 expenses) − $3,000 dividends declared]. Therefore, 12/31/Y1 assets must be $885,000.| Assets | = | Liabilities | + | Owners’ equity | | $885,000 | = | $120,000 | + | $765,000 |
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