Gem corporation is a new company and obtains financing by issuing common stock to investors for $30,000. during the year, gem earns $8,000 in net income and pays stockholders a dividend of $5,000. what is the total stockholders' equity at the end of the year?

$33,000

Explanation: In simple words, stockholders equity is that amount of assets in the company, that is not financed by a liability. Thus, we can say that it is the difference between the assets and liabilities of the business.

It can be computed using following formula :-

stockholders equity = issuance of common stock + net income - dividend paid

                                 = $30,000 + $8,000 - $5,000

                                 = $33,000

u = 30

continuing your method

= +

subtract from both sides

= - thus

= -

= ⇒ u = 30