Question

Jay Corporation has earned $175,900 after tax. The accountant calculated the return on equity as 12.5 percent. Jay Corporation's stockholders' equity to nearest dollar is: CHOICES: A) $140,720
B) $14,720

C) $1,407,200

D) $140,720,000

E) None of these

Answer 1

In order to find out the increase in equity, we just need to calculate :

  ($ 175,900 / 12.5 %) x 100    = $ 1,407,200

So the answer would be : C

hope this helps