Teamboo Company's stockholders' equity at the beginning of August 2015 was $750,000. During the month, the company earned net income of $175,000 and paid dividends of $75,000. At the end of August 2015, what is the amount of stockholders' equity?
A)$675,000
B)$750,000
C)$825,000
D)$850,000

Question

Quizplus · Accepted Answer

Starting stockholders' equity = $750,000
Net income for August = $175,000
Dividends paid in August = $75,000
Ending stockholders' equity = Starting stockholders' equity + Net income - Dividends paid
Ending stockholders' equity = $750,000 + $175,000 - $75,000 = $850,000. Therefore, the correct answer is D.

Teamboo Company's Stockholders' Equity at the Beginning of August 2015