Question

Teamboo Company's stockholders' equity at the beginning of August 2015 was $750,000. During the month, the company earned net income of $175,000 and paid dividends of $75,000. At the end of August 2015, what is the amount of stockholders' equity?

Answer 1

$ 850.000

Step-by-step explanation:

If we define the stockholders' equity as the sum of shares value plus Retained Earnings we then have a total amount of Stockholders equity at the end of August 2015 of $850.000.

Please see details bellow:

$750.000 Beginning Stockholders' Equity

$175.000 Earned Net Income

-$75.000 Dividends Paid

$850.000 Stockholders' Equity at the end of August 2015.