Question

Kramer Fabrications stockholders' equity at the beginning of July 2017 was $600,000. During the month, the company earned net income of $145,000 and paid dividends of $25,000. At the end of July 2017, what is the amount of stockholders' equity?

Answer 1

$720,000

Explanation:

As per the question,

Kramer Fabrications stockholders' equity at the beginning of July 2017

Stockholders' equity = $600,000

Net income earned = $145,000

Dividends paid = $25,000

Stockholders' equity at the end of of July 2017

= Net income - Dividend + Stockholders’ Equity

= $145,000 - $25,000 + $600,000

= $720,000

Therefore,

The amount of stockholders' equity at the end of of July 2017 = $720,000.