Nigiri Inc. began operations on October 1, 2014. During October, Nigiri sold ordinary shares for ¥440,000,000, earned net income of ¥64,000,000, and paid dividends of ¥1,978,000. Equity at the end of October is
A) ¥504,000,000.
B) ¥502,022,000.
C) ¥64,000,000.
D) ¥62,022,000.

Question

Quizplus · Accepted Answer

Equity at the end of October = Total equity as of September 30, 2014 + Net Income - Dividends
Total equity as of September 30, 2014 = 0 as it is the beginning of operations
Net Income = ¥64,000,000
Dividends = ¥1,978,000
Therefore, equity at the end of October = 0 + ¥64,000,000 - ¥1,978,000 = ¥62,022,000
Hence, the correct answer is option B.