At September 1, 2021, Promise Ring Co.reported stockholders' equity of $156,000. During the month, Promise Ring generated revenues of $38,000, incurred expenses of
$21,000, purchased equipment for $5,000 and paid dividends of $2,000.What is the amount of stockholders' equity at September 30, 2021?

Question

Quizplus · Accepted Answer

The stockholders' equity at the end of September is calculated as follows: Starting equity of $156,000 + Revenues of $38,000 - Expenses of $21,000 - Dividends of $2,000 = $171,000. The purchase of equipment does not affect equity directly.