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23 December, 10:17

Vista Camera Services started the year with total assets of $ 100 comma 000 and total liabilities of $ 55 comma 000. The revenues and the expenses for the year amounted to $ 120 comma 000 and $ 80 comma 000 , respectively. During the year, the company did not issue any common stock, but it distributed dividends of $ 50 comma 000. What is the amount of stockholders' equity at the end of the year?

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  1. 23 December, 11:58
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    The amount of stockholders' equity at the end of the year is $35,000

    Explanation:

    For computing the ending balance of the stockholder equity, first we have to compute the beginning balance of equity which is shown below:

    Total assets = Total liabilities + stockholder equity

    $100,000 = $55,000 + stockholder equity

    So, stockholder equity = $100,000 - $55,000

    = $45,000

    Now the ending balance of stockholder equity would equal to

    = Opening balance of stockholder equity + revenues - expenses - dividend paid

    = $45,000 + $120,000 - $80,000 - $50,000

    = $35,000
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