Question

Data for Bandkok Corp.:

2014: Assets $5,900, Liabilities $3,240, Dividends $1,080, Common Stock $972, Net Income $1,280
2015: Assets $6,480, Dividends $810, Common Stock $864, Net Income $864

What was Bandkok's stockholders' equity at January 1, 2015?

A. $3,832
B. $2,660
C. $2,860
D. $3,940

Answer 1

Bandkok's stockholders' equity at January 1, 2015, is calculated to be $2,660 by subtracting the company's liabilities from its assets at the end of 2014, following the basic accounting equation.

Step-by-step explanation:

The calculation of Bandkok's stockholders' equity at January 1, 2015, can be approached by using the basic accounting equation:

Assets = Liabilities + Stockholders' Equity

For the year 2014, we have:

• Assets = $5,900
• Liabilities = $3,240

Using the equation, Stockholders' Equity can be found as follows:

Stockholders' Equity = Assets - Liabilities

Stockholders' Equity = $5,900 - $3,240 = $2,660

Hence, Bandkok's stockholders' equity at January 1, 2015, is $2,660. Therefore, the correct answer is B. $2,660.