Gadsden Lawn Service began operations on January 1, 2010, when Doug Gadsden contributed $100,000 of cash and equipment. During the year, the company earned $200,000 of revenue, incurred $120,000 of expenses, and paid $10,000 of dividends. Total owner's equity at December 31, 2010 is
A) $ 0.
B) $100,000.
C) $170,000.
D) $180,000.
E) $190,000.

Question

Quizplus · Accepted Answer

Total owner's equity is equal to the initial investment plus net income minus dividends. Net income is equal to revenue minus expenses. Therefore, total owner's equity at December 31, 2010 is $100,000 + $200,000 - $120,000 - $10,000 = $170,000.

Gadsden Lawn Service Began Operations on January 1, 2010, When