A company reported total stockholders' equity of $540,000 on its balance sheet dated December 31,2018.During the year ended December 31,2019,the company reported net income of $60,000,declared and paid a cash dividend of $18,000,declared and distributed a 10% stock dividend with a $15,000 total market value,issued additional common stock for $70,000,and resold treasury stock for $15,000 that it had purchased in 2018 for $12,000.What is total stockholders' equity as of December 31,2019?
A)$640,000.
B)$670,000.
C)$667,000.
D)$655,000.

Question

Quizplus · Accepted Answer

We can use the following formula to calculate the total stockholders' equity as of December 31, 2019:

Total Stockholders' Equity = Beginning Stockholders' Equity + Net Income - Dividends + Additional Paid-In Capital + Common Stock Issued - Treasury Stock

Beginning Stockholders' Equity = $540,000

Net Income = $60,000

Dividends = $18,000

Additional Paid-In Capital = $0

Common Stock Issued = $70,000

Treasury Stock = $12,000 - $15,000 = ($3,000)

Total Stockholders' Equity = $540,000 + $60,000 - $18,000 + $0 + $70,000  - $3,000= $667,000

Therefore, the answer is option C: $667,000.

A Company Reported Total Stockholders' Equity of $540,000 on Its