At September 1,2011, Crews Co. reported equity of $£ 136,000$. During the month, Crews generated revenues of $£ 20,000$, incurred expenses of $£ 12,000$, purchased equipment for $£ 5,000$ and paid dividends of $£ 2,000$. What is the amount of equity at September 30, 2011 ?

Question

Quizplus · Accepted Answer

The equity increases by the net income (revenues - expenses) and decreases by dividends. Net income is $£ 20,000 - £ 12,000 = £ 8,000$. Equity increases by $£ 8,000$ and decreases by dividends of $£ 2,000$, resulting in a net increase of $£ 6,000$. Therefore, the new equity is $£ 136,000 + £ 6,000 = £ 142,000$.

At September 1,2011, Crews Co £136,000£ 136,000£136,000 During the Month, Crews Generated Revenues Of £

At September 1,2011, Crews Co $£ 136,000$ During the Month, Crews Generated Revenues Of £