Lewis Company has $25,000 in retained earnings, $40,000 in assets, and $11,000 in liabilities.How much is in common stock?

Question

Quizplus · Accepted Answer

Total Equity = Total Assets - Total Liabilities
Retained Earnings + Common Stock = Total Equity
Given:
Retained Earnings = $25,000
Total Assets = $40,000
Total Liabilities = $11,000
$40,000 - $11,000 = $29,000 (Total Equity)
$25,000 (Retained Earnings) + Common Stock = $29,000 (Total Equity)
Common Stock = $29,000 - $25,000
Common Stock = $4,000

Lewis Company Has $25,000 in Retained Earnings, $40,000 in Assets