Joe Donaldson Deposited $80,000 in a Bank Account, Purchased a Company

question 20

Multiple Choice

Joe Donaldson deposited $80,000 in a bank account, purchased a company for $60,000 cash (Building $40,000 and Inventory $20,000) , performed services for clients for $10,000 cash, purchased supplies for $5,000 cash, and paid utilities of $2,000 cash. The amount of stockholders' equity at the end of the period is:

• A)$60,000.
• B)$80,000.
• C)$140,000.
• D)none of the above.

---

Definitions:

Income Statement

A financial document that reports a company's financial performance over a specific accounting period, detailing revenue, expenses, and net income.

Balance Sheet

A record that presents a summary of a business's assets, liabilities, and shareholders' equity at a given time.

Return on Assets

A financial ratio that measures the profitability of a company in relation to its total assets.

Net Income

The profit remaining after all expenses, taxes, and costs have been deducted from total revenue.