Question

The owners' equity in Jack's Taylor Shop was $31,300 at the beginning of the year. During the year, the company had aftertax income of $4,900, of which $1,600 was paid in dividends. Also during the year, the company repurchased $2,000 of stock from one of the shareholders. What is the value of the owners' equity at year end?. Please record your answer using the following format (1407.00). Record your answer to two decimal places. Do NOT place a "$" in front of the number. Finally, do not use a comma to separate hundreds from thousands. Do not type the parentheses: just type the number! Your Answer:

Answer 1

Answer:

The value of the owners' equity at year end is $36,600

Explanation:

The computation of the ending balance of shareholder equity is shown below:

= Beginning balance of equity + net income - dividend paid + repurchased shares

= $31,300 + $4,900 - $1,600 + $2,000

= $36,600

The net income and the repurchased shares are added whereas the dividend is to be deducted from the beginning balance of the equity.