Question

Swifty Corporation started the year with total assets of $300000 and total liabilities of $240000. During the year the business recorded $633000 in revenues, $335000 in expenses, and dividends of $61000. Stockholders’ equity at the end of the year was
a) 275000
b) 363000
c) 305000
d) 297000

Answer 1

Answer:

The answer is d) 297000

Step-by-step explanation:

The stockholders' equity of a company represents the amount of money that will be returned to the accionists if all the assests will be liquidated and the compan'y debt will be paid.  So to calculate the Swifty Corporation stockholders' equity at the end of the year you need to add all what enters to the company (assets and revenues) and substract all what goes out (liabilities, expenses and dividends).

- What enters?

• The starting assets = $300.000
• Revenues = $633.000

Total incomes = $300.000 + $633.000 = $933.000

- What goes out?

• Liabilities = $240.000
• Expenses = $335.000
• Dividends = $ 61.000

Total expenses = $240.000 + $335.000 + $61.000 = $636.000

Stockholders' equity = Total income - Total expenses

Stockholders' equity = $933.000 - $636.000 = $297.000