Teamboo Company's stockholders' equity at the beginning of August 2022 was $750,000.During the month, the company earned net income of $175,000 and paid dividends of $75,000.At the end of August 2022, what is the amount of stockholders' equity?

Question

Quizplus · Accepted Answer

The stockholders' equity at the beginning of August was given as $750,000. 
The net income earned during August 2022 is $175,000. So, the updated stockholders' equity after adding net income will be:
$750,000 + $175,000 = $925,000 
But during August 2022, the company paid dividends of $75,000. So, the updated stockholders' equity after deducting dividends will be:
$925,000 - $75,000 = $850,000
Hence, the correct option is D.

Teamboo Company's Stockholders' Equity at the Beginning of August 2022