Campbell Soup Co. had the following assets and liabilities (inmillions) as of Ju

Question

Campbell Soup Co. had the following assets and liabilities (inmillions) as of July 31, 2005.

Assets             $6,776

Liabilities        5,506

a.       Determine thestockholders’ equity of Campbell soup as of July 31, 2005

b.      If assets increased by $1,094and liabilities increased by $596, what was the increase ofdecrease in stockholders’ equity for the year ending July 30,2006?

c.       What were the totalassets, liabilities, and stockholders’ equity as of July 30,2006?

d.      Based upon your answer to (c),does the accounting equation balance?

Explanation / Answer

A. Assets = Liabilities + Owners equity     6,776   = 5,506 + Owners equity Owners equity = 6,776-5,506                      = $ 1,270 B. Assets = Liabilities + Owners equity         6,776 = 5,506 + 1,270    + 1,094    596     7,870 = 6,102 + owners equity Owners equity = 7,870 -6,102                        = $ 1,768 C. Total assets    =          $ 7,870 Total liabilities =          $ 5,506 Owners equity =          $ 1,768 D. Yes , the accounting equation balances as follows 7,870 = 5,506 + 1,768

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