Stahl Consulting started the year with total assets of $60,000 and total liabilities of $15,000. During the year, the business recorded $48,000 in catering revenues and $30,000 in expenses. Stahl issued stock of $9,000 and paid dividends of $15,000 during the year. The stockholders' equity at the end of the year was
A) $33,000.
B) $54,000.
C) $57,000.
D) $63,000.

Question

Quizplus · Accepted Answer

At the beginning of the year:
Total assets = $60,000
Total liabilities = $15,000
Stockholders' equity = Total assets - Total liabilities = $60,000 - $15,000 = $45,000

During the year:
Catering revenues = $48,000
Expenses = $30,000
Net income = Catering revenues - Expenses = $48,000 - $30,000 = $18,000

At the end of the year:
Stock issued = $9,000
Dividends paid = $15,000
Total stockholders' equity = Beginning stockholders' equity + Net income + Stock issued - Dividends paid
Total stockholders' equity = $45,000 + $18,000 + $9,000 - $15,000 = $57,000.

Therefore, the best choice is C.

Stahl Consulting Started the Year with Total Assets of $60,000