Question

The owners' equity for The Deer Store was $58,900 at the beginning of the year. During the year, the company had aftertax income of $4,200, of which $3,200 was paid in dividends. Also during the year, the company repurchased $6,500 of stock from one of the shareholders. What is the value of the owners' equity at year end?

Answer 1

Answer:

The owner's equity at the end of the year results to $64,400

Explanation:

We are able to calculate this through simple addition and subtraction

First we must view how much was payed through tax

t = 4,200 - 3,200 = 1,000

58,900 - 1,000 = 57,900

Than, due to the repurchase of $6,500 of stock, we must include this within our final equation

57,900 + 6,500 = 64,400

Hope this helps