Jamal Company began the year with $126000 in its Common Stock account and a balance in Retained Earnings of $54000.During the year the company earned net income of $27000 and declared and paid $9000 of dividends.In addition the company sold additional common stock amounting to $33000.Based on this information what should the transaction analysis show for the ending total of all stockholders' equity accounts?

Question

Quizplus · Accepted Answer

The total stockholders' equity is the sum of the common stock and retained earnings. The beginning total is $126000 + $54000 = $180000. The net income of $27000 increases the retained earnings to $54000 + $27000 = $81000. The dividends of $9000 decrease the retained earnings to $81000 - $9000 = $72000. The additional common stock of $33000 increases the common stock to $126000 + $33000 = $159000. The ending total of all stockholders' equity accounts is $159000 + $72000 = $231000.

Jamal Company Began the Year with $126000 in Its Common