Houghton Company has the following items: share capital-ordinary, €820,000; treasury shares, €85,000; deferred taxes, €100,000 and retained earnings, €313,000. What amount should Houghton Company report as total equity?
A) €948,000.
B) €1,048,000.
C) €1,148,000.
D) €1,218,000.

Question

Quizplus · Accepted Answer

Total equity is calculated by adding share capital, retained earnings, and any other equity items such as treasury shares and deferred taxes. Thus, the total equity for Houghton Company is €820,000 (share capital) + €313,000 (retained earnings) - €85,000 (treasury shares) + €100,000 (deferred taxes) = €1,048,000.

Houghton Company Has the Following Items: Share Capital-Ordinary, €820,000; Treasury