On January 1, 2022, Cat Power Company reported stockholders' equity of $705,000.During the year, the company paid dividends of $30,000.At December 31, 2022, the amount of stockholders' equity was $825,000.What amount of net income or net loss would the company report for 2022?

Question

Quizplus · Accepted Answer

The company would report a net income of $150,000 for 2022. This is calculated by taking the ending stockholders' equity of $825,000, subtracting the beginning stockholders' equity of $705,000, and adding back the dividends paid of $30,000. The calculation is $825,000 - $705,000 + $30,000 = $150,000.

On January 1, 2022, Cat Power Company Reported Stockholders' Equity