Winsome Inc.reports total assets and total liabilities of $225,000 and $100,000,respectively,at the conclusion of its first year of business.The company earned $75,000 during the first year and distributed $30,000 in dividends.What was the corporation's share capital?

Question

Quizplus · Accepted Answer

The formula for calculating share capital is:

Share capital = Total assets - Total liabilities - Retained earnings - Dividends

Using the information given in the problem:

Share capital = $225,000 - $100,000 - ($75,000 - $30,000)
Share capital = $225,000 - $100,000 - $45,000
Share capital = $80,000

Therefore, the corporation's share capital was $80,000.