Question

Question 1 0.4 pts Precision Camera Services started the year with total assets of $90,000 and total liabilities of $65,000. The revenues and the expenses for the year amounted to $100,000 and $70,000, respectively. During the year, the company did not issue any common stock, but it distributed dividends of $40,000. What is the amount of stockholders' equity at the end of the year? AS $100,000 $40,000 $15.000 O $70,000 a HD

Answer 1

C. Is the correct answer

Calculation of stockholder's equity Ending of the year

Precision camera company started the year, so assets and liablitites are the beginning of the year.

now we can calculate beginning equity.

Beginning equity = Beginning Assets - Beginning Liablitites

Beginning equity = 90,000 - 65,000 = 25,000

For the calculation of shareholder's equity ending of the year

Ending Equity = Beginning equity + Revenue - Expenses - Dividend

Ending Equity = 25,000 + 100,000 - 70,000 - 40,000 = 15,000

Ending equity = 15,000