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Kareem's Rental Ltd.started the year with total assets of $70,000 and total liabilities of $40,000.During the year, the business recorded $100,000 in car repair revenues, $65,000 in expenses, and paid dividends of $5,000.
-Shareholders' equity at the end of the year was
A)$60,000.
B)$65,000.
C)$70,000.
D)$75,000.

Question

Use the following information for questions 
Kareem's Rental Ltd.started the year with total assets of $70,000 and total liabilities of $40,000.During the year, the business recorded $100,000 in car repair revenues, $65,000 in expenses, and paid dividends of $5,000.
-Shareholders' equity at the end of the year was
A)$60,000.
B)$65,000.
C)$70,000.
D)$75,000.

Quizplus · Accepted Answer

Shareholders' equity = Total assets - Total liabilities= $70,000 - $40,000= $30,000Add net income to shareholders' equity= $30,000 + ($100,000 - $65,000 - $5,000)= $60,000

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