Brown Corporation reported the following amounts at the end of the first year of operations, December 31, 20A: share capital $20,000; sales revenue $95,000; total assets $85,000, no dividends, and total liabilities $35,000. What would shareholders' equity and total expenses be?

Question

Quizplus · Accepted Answer

Shareholders' equity can be calculated as total assets minus total liabilities, which is $50,000 ($85,000 - $35,000). Total expenses can be calculated as sales revenue minus net income (which is zero because there were no dividends), which is $65,000 ($95,000 - $0).

Brown Corporation Reported the Following Amounts at the End of the First