Question

Torres Travel’s stockholders' equity at the beginning of March 2022 was $200,000. During the month, the company earned net income of $50,000 and paid dividends of $10,000. At the end of March 2022, what is the amount of stockholders' equity?

Answer 1

At the end of March 2022, the amount of stockholders' equity is $240,000

Step-by-step explanation:

The net income of $50,000 increases the amount of stockholders' equity:

stockholders' equity + net income = $250,000

And the paid dividends of $10,000 decreases the amount of stockholders' equity:

stockholders' equity - paid dividends = $240,000