On January 1, Year 3, Wayfarer Company's assets were \( \$ 240,000 \) and its stockholders' equity was \( \$ 112,000 \). During the year, assets increased \( \$ 12,000 \) and llabilitles decreased \( \$ 8,000 \). Requlred: Determine the amount of stockholders' equity at December 31 , Year 3 . Stockholders' equity

To determine the **stockholders' equity at December 31, Year 3** for Wayfarer Company, we'll use the **accounting equation**: \[ \text{Assets} = \text{Liabilities} + \text{Stockholders' Equity} \] ### Step 1: Determine Initial Liabilities **On January 1, Year 3:** - **Assets:** \$240,000 - **Stockholders' Equity:** \$112,000 Using the accounting equation: \[ \text{Liabilities} = \text{Assets} - \text{Stockholders' Equity} = \$240,000 - \$112,000 = \$128,000 \] ### Step 2: Calculate Changes During the Year - **Assets increased by:** \$12,000 - **Liabilities decreased by:** \$8,000 **New Assets:** \[ \$240,000 + \$12,000 = \$252,000 \] **New Liabilities:** \[ \$128,000 - \$8,000 = \$120,000 \] ### Step 3: Determine New Stockholders' Equity Using the updated values in the accounting equation: \[ \text{Stockholders' Equity} = \text{Assets} - \text{Liabilities} = \$252,000 - \$120,000 = \$132,000 \] ### **Conclusion** **The stockholders' equity at December 31, Year 3 is \$132,000.**