At the end of its first month of operations, Michael's Consulting Services, Inc. reported net income of $25,000. They also had account balances of: Cash, $18,000; Office Supplies, $2,000 and Accounts Receivable $10,000. The stockholders' total investment for this first month was $5,000. Calculate the ending balance in Stockholders' Equity to be reported on the Balance Sheet.
A)$30,000
B)$25,000
C)$20,000
D)$5,000
E)$7,000

Question

Quizplus · Accepted Answer

The ending balance in Stockholders' Equity is calculated by adding the initial investment by stockholders ($5,000) to the net income ($25,000), resulting in $30,000.

At the End of Its First Month of Operations, Michael's