Bateman Company reported total shareholders' equity of $58,000 on its statement of financial position dated December 31,20B.During 20B,it reported a profit of $4,000,declared and paid a cash dividend of $2,000,and issued additional shares of $20,000.What was total shareholders' equity at January 1,20B?

Question

Quizplus · Accepted Answer

The total shareholders' equity at the end of the year is given as $58,000. During the year, the company declared and paid a cash dividend of $2,000 and issued additional shares of $20,000.

Therefore, the total shareholders' equity at the beginning of the year can be calculated as follows:

Beginning shareholders' equity = Ending shareholders' equity - Net income + Dividends + Issuance of new shares

Beginning shareholders' equity = $58,000 - $4,000 + $2,000 + $20,000 = $36,000

Hence, choice C) $36,000 is the best answer.

Bateman Company Reported Total Shareholders' Equity of $58,000 on Its