On January 1 of the Current Year, Jimmy's Sandwich Company

question 168

Multiple Choice

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:

• A)A decrease of $9,500.
• B)An increase of $9,500.
• C)An increase of $30,500.
• D)A decrease of $30,500.
• E)An increase of $73,500.

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Definitions:

Conflagration Insurance

Insurance coverage designed to protect against losses from large and intensive fires that consume a wide area and a large amount of property.

Property Damage

Harm or destruction that affects the value or use of physical property.

Personal Injuries

Physical or emotional harm caused to an individual, often leading to legal action in order to receive compensation.

Appraisal Clause

A provision in insurance policies requiring disputes over the value of a claim to be resolved by an independent appraiser.