Question

Question 10 2 pts A fiscal year for a business ordinarily begins on the first day of a month and ends on the last day of the following twelfth month O is determined by the federal government always begins on January 1 and ends on December 31 of the same year should end at the height of the business's annual operating cycle Question 11 2 pts Redfox Pest Control Service had revenues of $425,000 and expenses of $338,000 for the current year, ended June 30. At the beginning of the year, the common stock was $110,000 and the retained earnings was $70,000. During the year, shareholders purchased an additional $25,000 in stock. Dividends of $16,750 were paid. What is the balance of stockholders' equity at the end of the year? a.$292,000 b.$267,250 c.$205,250d. $275,250

Answer 1

Answer:

d. $275,250

Explanation:

The computation of the balance of stockholder equity is shown below:

Stockholder equity = Common stock + retained earnings

Where,

Common stock = Beginning balance of common stock + additional stock purchased

= $110,000 + $25,000

= $135,000

And, the retained earnings is

= Beginning balance retained earning + revenues earned - expenses incurred - dividend paid

= $70,000 + $425,000 - $338,000 - $16,750

= $140,250

So, the ending balance of stockholder equity is

= $135,000 + $140,250

= $275,250