Ivey Company began operations on January 1, 2019, with an investment of $186,000 by each of its two stockholders, or a total of $372,000. Net income for its first year of business was $654,000. During the year, the company paid dividends of $90,000 each to its two stockholders.
How much is the company's ending Stockholders' Equity on December 31, 2019?
A) $834,000
B) $648,000
C) $744,000
D) $846,000

Question

Quizplus · Accepted Answer

Ending stockholders' equity = Beginning stockholders' equity + Contributed capital + Net income - Dividends
X = $0 + $372,000 + $654,000 - ($90,000 x 2)
X = $846,000

Ivey Company Began Operations on January 1, 2019, with an Investment