During Year 2, Millstone Company Provided $6,500 of Services for Cash

Multiple Choice

During Year 2, Millstone Company provided $6,500 of services for cash, paid cash dividends of $1,000 to owners, and paid $4,000 cash for expenses. Liabilities were unchanged. Which of the following statements accurately describes the effect of these events on the elements of the company's financial statements?

A) Assets increased by $6,500.
B) Assets increased by $1,500.
C) Stockholders' equity increased by $2,500.
D) Assets increased by $5,500.