Question

Saira's Maid Service began the year with total assets of $120,000 and stockholders' equity of $40,000. During the year the company earned $90,000 in net income and paid $20,000 in dividends. Total assets at the end of the year were $215,000. How much was stockholders' equity at the end of the year? $130,000 $110,000 $150,000 $135,000

Answer 1

correct answer is b. $110,000

Step-by-step explanation:

given data

total assets = $120,000

stockholders' equity = $40,000

net income = $90,000

dividends = $20,000

Total assets at the end = $215,000

solution

we get here total Stockholders' equity at the end year that is express as

total Stockholders' equity year end = Beginning Balance + Net Income - Dividend ..........................1

put here value and we get

total Stockholders' equity year end = $40,000 + $90,000 - $20,000

total Stockholders' equity year end = $110,000

so correct answer is b. $110,000