cash $12,000\nsupplies 4,500\nprepaid rent 2,000\nsalaries expense 4,500\nequipment 65,000\nservice revenue…

cash $12,000\nsupplies 4,500\nprepaid rent 2,000\nsalaries expense 4,500\nequipment 65,000\nservice revenue 30,000\nmiscellaneous expense 20,000\ndividends 3,000\naccounts payable 5,000\ncommon stock 68,000\nretained earnings 8,000\nwhat is the amount of dillons total stockholders equity?\nmultiple choice\n$83,500\n$68,500\n$78,500\n$5,000

cash $12,000\nsupplies 4,500\nprepaid rent 2,000\nsalaries expense 4,500\nequipment 65,000\nservice revenue 30,000\nmiscellaneous expense 20,000\ndividends 3,000\naccounts payable 5,000\ncommon stock 68,000\nretained earnings 8,000\nwhat is the amount of dillons total stockholders equity?\nmultiple choice\n$83,500\n$68,500\n$78,500\n$5,000

Answer

Explanation:

Step1: Recall stockholders' equity formula

Stockholders' equity = Common Stock + Retained Earnings - Dividends.

Step2: Identify relevant amounts

Common Stock = $68,000, Retained Earnings = $8,000, Dividends = $3,000.

Step3: Calculate stockholders' equity

$68000 + 8000- 3000=73000$. However, we may have missed that revenues increase retained - earnings and expenses decrease retained - earnings. Net income = Service Revenue - Salaries Expense - Miscellaneous Expense = $30000 - 4500-20000 = 5500$. Adjusted retained earnings = $8000 + 5500=13500$. Then stockholders' equity = Common Stock+Adjusted Retained Earnings - Dividends = $68000+13500 - 3000=78500$.

Answer:

$78,500$