Benedict Company Compiled the Following Financial Information as of December

question 224

Multiple Choice

Benedict Company compiled the following financial information as of December 31, 2014: $$\begin{array} { l r } \text { Service revenue } & \$ 560,000 \\\text { Common stock } & 120,000 \\\text { Equipment } & 160,000 \\\text { Operating expenses } & 500,000 \\\text { Cash } & 140,000 \\\text { Dividends } & 40,000 \\\text { Supplies } & 20,000 \\\text { Accounts payable } & 80,000 \\\text { Accounts receivable } & 60,000 \\\text { Retained earnings, } 1 / 1 / 14300,000\end{array}$$ Benedict's stockholders' equity on December 31, 2014 is

• A) $420,000.
• B) $440,000.
• C) $320,000.
• D) $480,000.

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Definitions:

Net Worth

Assets minus liabilities, which demonstrates the value of a business.

Business Value

The importance or worth of something to a business, including tangible and intangible benefits that contribute to the company's success.

Balance Sheet

Also known as a “statement of financial position”; reveals a company’s assets, liabilities and owner’s equity (net worth).

Financial Position

Refers to the status of an entity's assets, liabilities, and equity at a specific point in time, providing insight into its economic situation.