Question

Precision Camera Services started the year with total assets of $80,000 and total liabilities of $40,000. The revenues and the expenses for the year amounted to $140,000 and $60,000​, respectively. During the​ year, the company did not issue any common​ stock, but it distributed dividends of $55,000. What is the amount of​ stockholders' equity at the end of the​ year?

Answer 1

Answer:

$65,000

Explanation:

Stockholder's equity is the net value of a company's asset. It is the remaining value of a company asset after adjusting for retained earnings and liabilities.  

For Precision Camera Services.

Current year additions to stakeholder equity will be the retained earnings.

Retained earning is revenues- expenses - dividends paid out  

=$140,000 - $60,000 - $55,000

=$25,000                

 

Stockholders equity : Assets + retained earning - liabilities

=$80,000 + $25,000 - $40,000

=$105,000- $40,000

=$65,000