Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall

Exercise 41

At the beginning of the year, owners’ equity totaled $119,000. During the year, net income was $35,000 and dividends of $29,000 were declared and paid. Owners’ equity at the end of the year was

a. $113,000.

b. $125,000.

c. $148,000.

d. $154,000.

Step 1 of 3

Shareholder’s Equity:

Shareholder’s Equity is also known by the name of Owner’s Equity. It is also one of the parts of Balance sheet other than assets and liabilities. It is the Capital contributed by the owner of his business.

The owner has right over his assets and he is liable for all his dues. Capital contributed and retained earnings are the two types of owner’s equity.