At the end of its first month of operations,JMP Consulting reported net income of $25,000.They also had account balances of: Cash,$18,000; Office Supplies,$2,000; and Accounts Receivable,$10,000.Stockholders' total investments for this first month was $5,000.There were no dividends in the first month. Calculate the amount of total stockholders' equity reported on the balance sheet at month-end.
A)$30,000
B)$25,000
C)$20,000
D)$5,000
E)$7,000

Question

Quizplus · Accepted Answer

The total stockholders' equity at month-end is calculated by adding the net income to the initial investment and subtracting any dividends. Since there were no dividends, the calculation is $5,000 (initial investment) + $25,000 (net income) = $30,000.

At the End of Its First Month of Operations,JMP Consulting