Vista Camera Services started the year with total assets of $100,000 and total liabilities of $50,000.The revenues and the expenses for the year amounted to $200,000 and $60,000,respectively.During the year,the company did not issue any common stock,but it distributed dividends of $75,000.Calculate the amount of increase or decrease in stockholders' equity for the year.

Question

Quizplus · Accepted Answer

The increase in stockholders' equity is calculated as: Net Income - Dividends. Net Income = Revenues - Expenses = $200,000 - $60,000 = $140,000. Increase in equity = $140,000 - $75,000 = $65,000.

Vista Camera Services Started the Year with Total Assets of $100,000