ABC Company's total stockholders' equity at the beginning of the year was $200,000.During the year ABC reported the following: Net loss of $30,000.
Stock issued in exchange for land totaling $80,000.
Collections of accounts receivable $40,000.
Dividends declared and paid totaling $2,000.
What is ABC's total stockholders' equity at the end of the year?

Question

Quizplus · Accepted Answer

The total stockholders' equity at the end of the year is calculated by starting with the beginning equity, adding any increases from stock issued, subtracting any net losses and dividends paid. Beginning equity is $200,000, stock issued adds $80,000, net loss subtracts $30,000, and dividends paid subtracts $2,000. Thus, the ending equity is $200,000 + $80,000 - $30,000 - $2,000 = $248,000. Collections of accounts receivable affect assets and cash flow but do not directly affect stockholders' equity.

ABC Company's Total Stockholders' Equity at the Beginning of the Year