York Casting Services Started the Year with Total Assets of $110,000

question 161

Multiple Choice

York Casting Services started the year with total assets of $110,000 and total liabilities of $50,000.The revenues and the expenses for the year amounted to $140,000 and $50,000,respectively.During the year,the company did not issue any common stock,but it distributed dividends of $70,000.Calculate the amount of increase or decrease in stockholders' equity for the year.

• A)a $20,000 increase
• B)a $80,000 increase
• C)a $60,000 decrease
• D)a $70,000 increase

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Definitions:

Distribution

The process of giving out products or goods to the final consumer or distributor.

Chapter 7 Liquidation

A bankruptcy process where a debtor's assets are sold off to pay creditors, leading to the closure of the business.

Insurance Company

A financial institution that provides various types of coverage to individuals and entities against potential future losses or damages.

Credit Union

A member-owned financial cooperative that provides traditional banking services.