York Casting Services started the year with total assets of

York Casting Services started the year with total assets of $110,000 and total liabilities of $50,000. The revenues and the expenses for the year amounted to $140,000 and $50,000, respectively

During the year, the company did not issue any common stock, but it distributed dividends of $70,000. Calculate the amount of increase or decrease in stockholders’ equity for the year.
A) a $20,000 increase
B) a $80,000 increase
C) a $60,000 decrease
D) a $70,000 increase

ANSWER

A .Equity (at the beginning of the year) = $110,000 – $50,000 = $60,000
Equity (at the end of the year) = Equity (beginning balance) – Dividends + Revenues – Expenses

Change in stockholders’ equity for the