Precision Camera Services started the year with total assets of $90,000 and total liabilities of $65,000. The revenues and the expenses for the year amounted to $100,000 and $70,000, respectively. During the year, the company did not issue any common stock, but it distributed dividends of $40,000. What is the amount of stockholders' equity at the end of the year?
A) $70,000
B) $100,000
C) $15,000
D) $40,000

Question

Quizplus · Accepted Answer

Stockholders' equity can be calculated using the following equation:
Stockholders' equity = Total assets - Total liabilities
Therefore, at the end of the year:
Stockholders' equity = $90,000 - $65,000 - $40,000 (dividends)
Stockholders' equity = $15,000

Precision Camera Services Started the Year with Total Assets of $90,000