Johnny's Car Repairs had total assets of $60,000 and total liabilities of $40,000 at the beginning of the year. During the year the business recorded $100,000 in revenues, $55,000 in expenses, and dividends of $10,000 were distributed. Equity at the end of the year is:
A) $55,000.
B) $35,000.
C) $65,000.
D) $45,000.

Question

Quizplus · Accepted Answer

Beginning equity was $20,000 ($60,000 - $40,000), profit for the year is $45,000 ($100,000 - $55,000) therefore $20,000 + $45,000 - $10,000 = $55,000.

Johnny's Car Repairs Had Total Assets of $60,000 and Total