Centro-matic Company began the year with stockholders' equity of $30,000. During the year, Centro-matic issued additional shares of stock in exchange for cash of $42,000, recorded expenses of $120,000, and paid dividends of $8,000. If Centro-matic's ending stockholders' equity was $112,000, what was the company's revenue for the year?
A) $160,000.
B) $168,000.
C) $202,000.
D) $210,000.

Question

Quizplus · Accepted Answer

The change in stockholders' equity is calculated as: Ending equity ($112,000) - Beginning equity ($30,000) = $82,000. The increase in equity from issuing stock is $42,000. The net income effect is $82,000 - $42,000 + $8,000 (dividends) = $48,000. Since expenses are $120,000, revenue must be $120,000 + $48,000 = $168,000.

Centro-Matic Company Began the Year with Stockholders' Equity of $30,000