Crusoe Waterworks Corporation provides plumbing services. Tr

Crusoe Waterworks Corporation provides plumbing services. Transactions of Crusoe Waterworks during the first year of operations are given below.

a) Received $4,000 cash and issued common stock to Robinson

b) Paid $3,000 cash for equipment to be used for plumbing repairs.
c) Borrowed $27,000 from a local bank and deposited the money in the checking account.
d) Paid $900 rent for the year.
e) Purchased $1,000 of office supplies on account.
f) Completed a plumbing repair project for a local lawyer and received $3,200 cash.

Calculate the amount of total stockholders’ equity after recording the transactions. Assume office supplies of $1,000 are left at the end of the year.
A) $6,300
B) $3,200
C) $4,000
D) $27,000

ANSWER

A .Equity (ending) = Common Stock — Dividends + Revenues – Expenses
Stockholders’ Equity = $4,000 + $3,200 – $900 = $6,300