Question

Kramer Fabrications stockholders' equity at the beginning of July 2022 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 2022, what is the amount of stockholders' equity?

Answer 1

$720,000

Step-by-step explanation:

Data provided in the question:

Equity at the beginning of July 2022 = $600,000

Earned net income of the company = $145,000

Dividends paid = $25,000

Now,

The amount of stockholders' equity at the end of the July 2022 will be

= Equity at the beginning of July 2022 + Earned net income - Dividends paid

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

= $720,000