Question

On January 1, 20A, two individuals invested $500,000 each to form Zoom Corporation. Zoom had total revenues of $90,000 during 20A and $300,000 during 20B. Total expenses for the same periods were $35,000 and $80,000 respectively. Cash dividends paid out to stockholders totaled $10,000 in 20A and $20,000 in 20B. What was Zoom's total stockholders' equity at the end of 20A and 20B?

            A. At the end of 20A____________

            B. At the end of 20B____________

Answer 1

A. At the end of 20A - Total stockholers equity = Contrubited Capital + Retained Earnings

= $500,000+ ($90,000-$35,000-$10,000) ; $545,000

B. At the end of 20B - Total stockholers equity = Contrubited Capital + Retained Earnings

= $500,000+($300,000-80,000-20,000)

= $700,000