Black Keys Company began the year with stockholders' equity of $280,000. During the year, the company recorded revenues of $375,000, expenses of $285,000, and paid dividends of $30,000. What was Black Keys' stockholders' equity at the end of the year?
A) $280,000.
B) $340,000.
C) $370,000.
D) $400,000.

Question

Quizplus · Accepted Answer

The ending stockholders' equity is calculated by adding net income (revenues - expenses) and subtracting dividends from the beginning stockholders' equity. Net income is $375,000 - $285,000 = $90,000. Therefore, ending equity is $280,000 + $90,000 - $30,000 = $340,000.

Black Keys Company Began the Year with Stockholders' Equity of $280,000