Notebook Company had the following transactions in 2013,its first year of operations. - Issued 2,000 common shares. Shares were issued at $\$ 50.00$ per share.
- Issued 100 preferred shares. Share were issued at $\$ 100$ per share.
- Earned net income of $\$95,000$.
-Paid dividends of $\$ 5,000$. At the end of 2013,how much was the total Shareholders' equity?

Question

Quizplus · Accepted Answer

Total Shareholders' equity is calculated as the sum of common stock, preferred stock, and retained earnings. Common stock is $2,000 \times \$50 = \$100,000$, preferred stock is $100 \times \$100 = \$10,000$, and retained earnings are net income minus dividends, which is $\$95,000 - \$5,000 = \$90,000$. Therefore, total Shareholders' equity is $\$100,000 + \$10,000 + \$90,000 = \$200,000$.

Notebook Company Had the Following Transactions in 2013,its First Year $50.00\$ 50.00$50.00

Notebook Company Had the Following Transactions in 2013,its First Year $\$ 50.00$