Question: 1. Total assets will exceed total liabilities and stockholders' equity by $16,000. This is because stockholders' equity (retained earnings) was decreased instead of increased by $8,000. Thus, stockholders' equity will be understated by a total of $16,000.
2. Net income is the excess of revenue over expenses, or $7,500. If expenses exceed revenue, the difference is a net loss. Dividends are the opposite of the stockholders' investing in the business and do not affect the amount of net income or net loss.