Orlando Corporation incorporated on January 2, 2017. During 2017, Orlando had the following transactions: ∙ issued 20,000 shares of common stock at $25 per share. The par value per share is $1.
∙ purchased 4000 shares of treasury stock at $28 per share
∙ had net income of $400,000.
What is the total amount of stockholders' equity as of December 31, 2017?

Question

Quizplus · Accepted Answer

The total stockholders' equity is calculated as follows: Common stock issued = 20,000 shares * $1 par value = $20,000. Additional paid-in capital = 20,000 shares * ($25 - $1) = $480,000. Treasury stock = 4,000 shares * $28 = $112,000. Net income = $400,000. Total stockholders' equity = Common stock + Additional paid-in capital + Net income - Treasury stock = $20,000 + $480,000 + $400,000 - $112,000 = $788,000.

Orlando Corporation Incorporated on January 2, 2017