Question

At the beginning of the year, Vendors, Incorporated, had owners' equity of $51,215. During the year, net income was $7,375 and the company paid dividends of $4,915. The company also repurchased $9,365 in equity. What was the owners' equity account at the end of the year?

Answer 1

To calculate the owners' equity at the end of the year, we can use the following formula:

\[
\text{Ending Owners' Equity} = \text{Beginning Owners' Equity} + \text{Net Income} - \text{Dividends} - \text{Repurchased Equity}
\]

We have the following values:
- Beginning Owners' Equity = $51,215
- Net Income = $7,375
- Dividends = $4,915
- Repurchased Equity = $9,365

Now, substituting these values into the formula:

\[
\text{Ending Owners' Equity} = 51,215 + 7,375 - 4,915 - 9,365
\]

Now we perform the calculations step by step:

1. Calculate \(51,215 + 7,375 = 58,590\)
2. Subtract dividends: \(58,590 - 4,915 = 53,675\)
3. Subtract repurchased equity: \(53,675 - 9,365 = 44,310\)

Thus, the owners' equity account at the end of the year is:

\[
\text{Ending Owners' Equity} = 44,310
\]

So, the owners' equity at the end of the year is **$44,310**.