The opening balance of shareholders' equity for Sedona Transport was $530,000.During the year, Sedona issued 50,000 common shares at market price of $3.50 per share.The company earned net income of $152,400, recorded other comprehensive income of ($2,300), and paid dividends of $10,000.What is the closing balance of shareholders' equity?
A)$670,100
B)$847,400
C)$845,100
D)$877,400

Question

Quizplus · Accepted Answer

Opening balance of shareholders' equity = $530,000
Net income during the year = $152,400
Other comprehensive income = ($2,300)
Dividends paid = ($10,000)
Total increase in shareholder's equity = $140,100

Sedona issued 50,000 common shares at a market price of $3.50 per share, which amounts to $175,000. This amount is added to the total increase in shareholder's equity to get the closing balance of shareholder's equity.

Closing balance of shareholders' equity = Opening balance + Total increase + Issuance of common shares
= $530,000 + $140,100 + $175,000
= $845,100

Therefore, the correct choice is C.

The Opening Balance of Shareholders' Equity for Sedona Transport Was