QUESTION 16 The following information was obtained from the David Corporation\'s

Question

QUESTION 16 The following information was obtained from the David Corporation's September financial statements. Determine the company's total stockholders' equity on September 30. Income Statement Revenues Expenses Net Income Statement of Retained Earnings Beginning Balance Net Income Subtotal Dividend:s Ending Balance Balance Sheet $95,000 $160,000 $300,000 $25,000 ssets Liabilities Stockholders' Equity Common Stock Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity $665,000 $900,000 $2,000,000 a. $1,200,000 b. $1,335,000 c. $1,565,000 d. $1,100,000

Explanation / Answer

Solution 16:

Total stockholder's equity = total liabilities ans stockholder's equity - Liabilities

= $2,000,000 - $665,000 = $1,335,000

Hence option b is correct.

Solution 17:

Increase in assets in february = $120,000

Increase in equity in february = $80,000

Therefore increase in liabilities in february = $120,000 - $80,000 = $40,000

Liabilities at the end of february = $4,900,000 + $40,000 = $4,940,000

Hence option a is correct.

Solution 18:

Dollar amount of resources paid to owners in september = Amount of dividend paid = $10,000

Hence option c is correct.

Solution 19:

Total assets = Total liabilities + Stockholder's equity = $1,100,000

Hence option c is correct.

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