On January 1 of the current year,Jimmy's Sandwich Company reported total stockholders' equity of $122,500.During the current year,total revenues were $96,000 while total expenses were $85,500.Also,during the current year the company paid $20,000 in dividends.No other changes in equity occurred during the year.The change in total equity during the year was:
A)A decrease of $9,500.
B)An increase of $9,500.
C)An increase of $30,500.
D)A decrease of $30,500.
E)An increase of $73,500.

Question

Quizplus · Accepted Answer

The change in equity is calculated as: Net Income - Dividends. Net Income = Total Revenues - Total Expenses = $96,000 - $85,500 = $10,500. Change in equity = $10,500 - $20,000 = -$9,500, which is a decrease of $9,500.

On January 1 of the Current Year,Jimmy's Sandwich Company Reported