At the start of the year, Gershon, Inc. had total shareholders' equity = $12,000. If net income during the year was a $200 loss, dividends paid = $400, and $1,000 was raised from the sale of new stock, what is the end of year value for total shareholders' equity?

Question

Quizplus · Accepted Answer

The end of year value for total shareholders' equity is calculated by starting with the beginning value ($12,000), adding any increases from the sale of new stock ($1,000), subtracting any losses (net income was a $200 loss), and subtracting any dividends paid ($400). So, $12,000 - $200 - $400 + $1,000 = $12,400.

At the Start of the Year, Gershon, Inc