Before the journal entry to record income tax and before the closing entries were recorded at the end of the accounting period (December 31, 20D), the following data were taken from the accounts of Buynow Corporation: What is the total amount of shareholders' equity that should be reported on the statement financial position dated December 31, 20D?

Question

Before the journal entry to record income tax and before the closing entries were recorded at the end of the accounting period (December 31, 20D), the following data were taken from the accounts of Buynow Corporation:  What is the total amount of shareholders' equity that should be reported on the statement financial position dated December 31, 20D?

Quizplus · Accepted Answer

To calculate the total amount of shareholders' equity, we need to add the common stock ($100,000), retained earnings ($104,000), and ending balance of the income summary account ($100,000 - $96,000 = $4,000). This gives us a total of $304,000 ($100,000 + $104,000 + $4,000).

Before the Journal Entry to Record Income Tax and Before