At the end of the accounting period, Isaac Company had a balance of $4,000 in its common stock account, additional paid in capital of $4,000, retained earnings of $3,000, and $1,000 of treasury stock. The total amount of stockholders' equity is:

Question

Quizplus · Accepted Answer

Stockholders' equity is the sum of common stock, additional paid-in capital, retained earnings, and treasury stock. Treasury stock is subtracted from the total because it represents shares that have been bought back by the company and are no longer outstanding. Therefore, the total stockholders' equity is $4,000 + $4,000 + $3,000 - $1,000 = $10,000.

At the End of the Accounting Period, Isaac Company Had