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7 September, 16:44

Joe's Repair Shop started the year with total assets of $200,000 and total liabilities of $160,000. During the year the business recorded $420,000 in revenues, $220,000 in expenses, and dividends of $40,000. It also issued $10,000 of additional stock to its shareholders. What is the stockholders' equity at the end of the year? $210,000 $200,000 $170,000 $250,000 $140,000

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  1. 7 September, 17:00
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    The stockholders' equity at the end of the year is $210,000

    Explanation:

    The computation of the ending stockholder equity is shown below

    = Opening balance of equity + issued shares + retained earnings

    where,

    Opening balance of equity = Total assets - total liabilities

    = $200,000 - $160,000

    = $40,000

    The issued shares is $10,000

    And, the retained earning = Revenue - expenses - dividend

    = $420,000 - $220,000 - $40,000

    = $160,000

    Now put these values to the above formula

    So, the answer would be equal to

    = $40,000 + $10,000 + $160,000

    = $210,000
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