During July, its first period of operations, Aju Inc. sold ordinary shares for W960,000,000, earned net income of W130,000,000, and paid dividends of W27,000,000. Equity at the end of July is

Question

Quizplus · Accepted Answer

Equity at the end of the period can be calculated using the formula:
Equity = Beginning Shares + Net Income - Dividends
Beginning Shares are not provided, so we assume it to be zero. 
Therefore, Equity = 0 + W130,000,000 - W27,000,000 = W103,000,000
Adding the total amount raised from share issuance, we get:
Equity = W960,000,000 + W103,000,000 = W1,063,000,000. 
Hence, the correct answer is B.

During July, Its First Period of Operations, Aju Inc