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 ________________? (

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.

Quote:

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Originally Posted by morgaine300

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.

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So the ending stockholders equity would be 110,000?

Yes, and how did you arrive at that?