Olmsted Company has the following items: common stock, $750,000; treasury stock, $105,000; deferred income taxes, $125,000 and retained earnings, $454,000. What total amount should Olmsted Company report as stockholders' equity?
A) $974,000.
B) $1,099,000.
C) $1,224,000.
D) $1,349,000.

Question

Quizplus · Accepted Answer

Stockholders' equity is calculated as common stock plus retained earnings minus treasury stock. Therefore, $750,000 (common stock) + $454,000 (retained earnings) - $105,000 (treasury stock) = $1,099,000. Deferred income taxes are not included in stockholders' equity.

Olmsted Company Has the Following Items: Common Stock, $750,000; Treasury