Presented below is the stockholders' equity section of Mead Corporation at December 31, 2007:
During 2008, the following transactions occurred relating to stockholders' equity:
3,000 shares were reacquired at $28 per share.
3,000 shares were reacquired at $35 per share.
1,800 shares of treasury stock were sold at $30 per share.
For the year ended December 31, 2008, Mead reported net income of $450,000. Assuming Mead accounts for treasury stock under the cost method, what should it report as total stockholders' equity on its December 31, 2008, balance sheet?
A) $1,965,000
B) $1,961,400
C) $1,957,800
D) $1,515,000

Question

Presented below is the stockholders' equity section of Mead Corporation at December 31, 2007:
 During 2008, the following transactions occurred relating to stockholders' equity:
3,000 shares were reacquired at $28 per share.
3,000 shares were reacquired at $35 per share.
1,800 shares of treasury stock were sold at $30 per share.
For the year ended December 31, 2008, Mead reported net income of $450,000. Assuming Mead accounts for treasury stock under the cost method, what should it report as total stockholders' equity on its December 31, 2008, balance sheet?
A) $1,965,000 
B) $1,961,400 
C) $1,957,800 
D) $1,515,000

Quizplus · Accepted Answer

$1,650,000 - (3,000 × $28) - (3,000 × $35) + (1,800 × $30) + $450,000 = $1,965,000

Presented Below Is the Stockholders' Equity Section of Mead Corporation