The change in Crystal Lodging's assets is 127,500 increase.
Calculate the company's net income for the year
- The net income of Crystal Lodging for the year would be $57,500. This is calculated by subtracting expenses from revenues ($330,000 - $247,500 = $82,500) and then subtracting the change in assets and liabilities from that ($82,500 - $50,000 - $25,000 = $57,500).
- The year was profitable for Crystal Lodging, with $330,000 in revenue and $247,500 in expenses. This led to a net profit for the business of $82,500, which is a successful outcome.Using Accounting Equation we can find thetotal increase in total assets:
Assets = Equity + Liabilities
Change in Assets = Change in Equity + Change in Liabilities
Change in Assets = $37,500 + $90,000
Change in Assets = $127,500
Total Change in equity and liabilities will be equal to the change in Assets.
So, the correct answer is b.$127,500 increase.
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