The 'Get Out There' Tour Company had equity of $60 000 at the beginning of the year. After a successful tourist season, dividends of $50 000 were paid and equity at the end of the year was $185 000. The profit for the year was:
A) $125 000
B) $175 000
C) $185 000
D) $235 000

Question

Quizplus · Accepted Answer

Profit for the year = Equity at the end of the year - Equity at the beginning of the year - Dividends 
Profit for the year = $185,000 - $60,000 - $50,000 
Profit for the year = $75,000 + $50,000 
Profit for the year = $125,000

Therefore, the profit for the year was $125,000, which is option B.

The 'Get Out There' Tour Company Had Equity of $60