On January 1,2012,Gucci Brothers Inc.started the year with a $492,000 balance in Retained Earnings and a $605,000 balance in Common Stock.During 2012,the company earned net income of $92,000,paid a dividend of $15,200,and issued more common stock for $27,500.What is total stockholders' equity on December 31,2012?

Question

Quizplus · Accepted Answer

To find the total stockholders' equity on December 31,2012, we need to take into account the changes in Retained Earnings, Common Stock, and net income, dividend, and issuance of common stock during the year.

Starting balance:
Retained Earnings = $492,000
Common Stock = $605,000

Add: Net Income = $92,000

Subtract: Dividend = $15,200

Add: Issuance of Common Stock = $27,500

Ending balance:
Retained Earnings = $569,300 ($492,000 + $92,000 - $15,200)
Common Stock = $632,800 ($605,000 + $27,500)

Total Stockholders' Equity = $1,201,300 ($569,300 + $632,800)

Therefore, the correct answer is choice C.