Moretown Company had the following transactions in 2015, its first year of operations. • Issued 30,000 shares of common stock. Stock has par value of $1.00 per share and was issued at $18.00 per share.
• Earned net income of $70,000.
• Paid no dividends.
At the end of 2015, what is the total amount of stockholders' equity?
A)$30,000
B)$610,000
C)$540,000
D)$70,000

Question

Quizplus · Accepted Answer

The total stockholders' equity is calculated by adding the common stock issued and the net income. Common stock issued is 30,000 shares at $18 per share, totaling $540,000. Adding the net income of $70,000 gives a total stockholders' equity of $610,000.

Moretown Company Had the Following Transactions in 2015, Its First