On January 1 of the current year Jimmys Sandwich C During th

On January 1 of the current year, Jimmy\'s Sandwich C During the current year, total revenues were $108,000 while total expenses were $97,500. Also, during the current year paid $32,000 in cash dividends. No other changes in equity occurred during the year If, on December 31 of the current year, total assets are $208,000, the change in total stockholders equity during the year was y reported stockholders equity totaling $129,000 D awumum

Solution

Calculation of increase or decrease in shareholders’ equity

Particulars

Amount

Total revenue

$108,000

Less: Total expenses

($97,500)

Net profit (A)

$10,500

Cash dividends paid (B)

$32,000

Dividends paid out of past reserves (C=A-B)

($21,500)

Therefore there is a decrease of $21,500 in shareholders’ equity during the current year

Ans) Option (D) a decrease of S21, 500 is correct

Calculation of increase or decrease in shareholders’ equity
Particulars	Amount
Total revenue	$108,000
Less: Total expenses	($97,500)
Net profit (A)	$10,500
Cash dividends paid (B)	$32,000
Dividends paid out of past reserves (C=A-B)	($21,500)
Therefore there is a decrease of $21,500 in shareholders’ equity during the current year
Ans) Option (D) a decrease of S21, 500 is correct