View Full Version : Accounting ending stockholders equity
gwood2
Sep 23, 2009, 11:05 PM
Saathoff Inc 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, $320,000 in expenses, and dividends of $30,000. Stockholders' equity at the end of the year was ________________? (
morgaine300
Sep 23, 2009, 11:22 PM
First you need to find the beginning equity balance using your accounting equation.
From there, you need to learn this about equity:
Beginning Balance
+ Additional issuances of Stock
+ Net Income
- Dividends
= Ending Balance
Please note that the items in bold are separated from the stock account and put into the retained earnings account. (Equity for a corporation is divided between stock and retained earnings.)
The problem doesn't say anything about issuances of stock, so you just assume that stayed the same.
gwood2
Sep 23, 2009, 11:30 PM
First you need to find the beginning equity balance using your accounting equation.
From there, you need to learn this about equity:
Beginning Balance
+ Additional issuances of Stock
+ Net Income
- Dividends
= Ending Balance
Please note that the items in bold are separated from the stock account and put into the retained earnings account. (Equity for a corporation is divided between stock and retained earnings.)
The problem doesn't say anything about issuances of stock, so you just assume that stayed the same.
So the ending stockholders equity would be 110,000?
Addi38
Sep 24, 2009, 12:10 AM
Yes, and how did you arrive at that?