Fat Possum's Service Shop Started the Year with Total Assets

question 116

Multiple Choice

Fat Possum's Service Shop started the year with total assets of $330,000 and total liabilities of $240,000. During the year, the business recorded $630,000 in revenues, $420,000 in expenses, and paid dividends of $60,000. Stockholders' equity at the end of the year was

• A) $90,000.
• B) $240,000.
• C) $300,000.
• D) $360,000.

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Definitions:

Equivalent Ratio

A ratio that has the same value when compared to another ratio, despite possibly having different terms.

Ratio

A relationship between two quantities expressed as the quotient of one divided by the other.

Equivalent Ratio

A way to express the same relationship or proportion between two quantities, although the numbers involved may differ.

Equivalent Ratio

A proportional relationship between two quantities showing how many times one value contains or is contained within the other.