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On January 1 of the current year, Jimmy's Sandwich Company, Inc. reported stockholders' equity totaling $122,500. During the current year, total revenues were $96,000 while total expenses were $85,500. Also, during the current year the business paid $20,000 to the stockholders. No other changes in equity occurred during the year. If, on December 31 of the current year, total assets are $196,000, the change in stockholders' equity during the year was:

Respuesta :

Answer:

The multiple choices are:

A decrease of $9,500.

An increase of $9,500.

An increase of $30,500.

A decrease of $30,500.

An increase of 73,500.

The correct option is  a decrease of $9,500

Explanation:

The changes in stockholders' equity is in the form of the difference between inflow to stockholders and outflow to stockholders.

Inflow to stockholders is the earnings attributable to them in form of net income while outflow is the dividends paid to them.

net income=revenues-expenses=$96,000-$85,500=$10,500

Dividends were paid to the tune of $20,000

change in stockholders' equity=$10,500-$20,000=-$9,500

In essence ,the opening balance of stockholders' equity went down by $9,500 since the net income generated of $10,500 was not enough to fund dividend payment

Answer:

Explanation:a

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