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Metropolitan Casting Services started the year with total assets of $ 100, 000 and total liabilities...

Metropolitan Casting Services started the year with total assets of $ 100, 000 and total liabilities of $ 40,000. The revenues and the expenses for the year amounted to $ 140000 and $ 80,000​, respectively. During the​ year, the company did not issue any common​ stock, but it distributed dividends of $ 40,000. Calculate the amount of increase or decrease in​ stockholders' equity for the year.

A. $ 20,000 increase

B. $ 60,000 decrease

C.$ 40.000 increase

D.$ 80,000 increase

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Answer #1

The correct answer is A. 20,000 increase

Note:

Change in Equity = Total revenue - expenses - dividends

= 140000 - 80000 -40000

= $ 20,000 increase

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