Mofro's Computer Repair Shop started the year with total assets of $300,000 and total liabilities of $200,000.During the year, the business recorded $500,000 in computer repair revenues, $300,000 in expenses, and Mofro paid dividends of $50,000.Stockholders' equity at the end of the year was

Question

Quizplus · Accepted Answer

At the beginning of the year, the total assets were $300,000 and total liabilities were $200,000. This means the stockholders' equity was $100,000 ($300,000 - $200,000). 
During the year, the business recorded $500,000 in computer repair revenues and $300,000 in expenses, resulting in a net income of $200,000 ($500,000 - $300,000). 
If Mofro paid dividends of $50,000 from the net income, then the remaining net income would be added to the stockholders' equity. 
Therefore, at the end of the year, stockholders' equity would be $250,000 ($100,000 + $200,000 - $50,000).

Mofro's Computer Repair Shop Started the Year with Total Assets