The net income of Hollywood Talent Services is $26,000. The beginning and ending stockholders' equity balances were $35,000 and $56,000, respectively. The company issued no common stock. Calculate the amount of dividends.
A) $15,000
B) $5,000
C) $9,000
D) $8,000

Question

Quizplus · Accepted Answer

The change in stockholders' equity is $56,000 - $35,000 = $21,000. Since net income is $26,000 and no stock was issued, dividends must be $26,000 - $21,000 = $5,000.

The Net Income of Hollywood Talent Services Is $26,000