Answer:
D. $4,000.
The Stockholders' equity increase by two items, one is the issued stock of $3,000 that increase equity and cash in assets part, and the result before dividends of $1,000 that increase retained earnings in the equity part and cash in the assets part.
The Net income of the year was $6,000 but were paid in dividends -$5,000, so the retained earnings is $1,000
Explanation:
START END
TOTAL ASSETS $20,000 $24,000
TOTAL LIABILITIES $5,000 $5,000
Common Stock $3,000
Retained Earnings $1,000
Capital $15,000 $15,000
TOTAL EQUITY $15,000 $19,000
Income Statement
Sales $16,000
Cost of goods sold -$10,000
Gross Profit $6,000
Dividends -$5,000
$1,000
