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Stahl Consulting started the year with total assets of €60,000 and total liabilities of €15,000.During the year, the business recorded €48,000 in catering revenues and €24,000 in expenses.Stahl issued ordinary shares of €9,000 and paid dividends of €15,000 during the year.
-Equity changed by what amount from the beginning of the year to the end of the year?

Question

Use the following information for questions 
Stahl Consulting started the year with total assets of €60,000 and total liabilities of €15,000.During the year, the business recorded €48,000 in catering revenues and €24,000 in expenses.Stahl issued ordinary shares of €9,000 and paid dividends of €15,000 during the year.
-Equity changed by what amount from the beginning of the year to the end of the year?

Quizplus · Accepted Answer

The change in equity is calculated as: Beginning Equity + Issued Shares + Net Income - Dividends. Beginning Equity = Total Assets - Total Liabilities = €60,000 - €15,000 = €45,000. Net Income = Revenues - Expenses = €48,000 - €24,000 = €24,000. Change in Equity = €45,000 + €9,000 + €24,000 - €15,000 = €63,000. Therefore, the change in equity is €63,000 - €45,000 = €18,000.

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