During Year 2,Millstone Company provided $6,500 of services for cash,paid cash dividends of $1,000 to owners,and paid $4,000 cash for expenses.Liabilities were unchanged.Which of the following statements accurately describes the effect of these events on the elements of the company's financial statements?

Question

Quizplus · Accepted Answer

Cash, an asset, increased by $1,500 (calculated as receipts of $6,500 ? payment of $1,000 ? payment of $4,000). stockholders' equity also increased by $1,500 (calculated as revenue of $6,500 ? dividends of $1,000 ? expenses of $4,000).

During Year 2,Millstone Company Provided $6,500 of Services for Cash,paid