A company reported total stockholders' equity of $340,000 on its balance sheet dated December 31, 2016. During the year ended December 31, 2017, the company reported net income of $40,000, declared and paid a cash dividend of $8,000, declared and distributed a 10% stock dividend with a $10,000 total market value, issued additional common stock for $60,000, and paid $12,000 to purchase treasury stock. What is total stockholders' equity as of December 31, 2017?
A)$432,000.
B)$410,000.
C)$444,000.
D)$420,000.

Question

Quizplus · Accepted Answer

The total stockholders' equity as of December 31, 2017, is calculated as follows: Start with $340,000, add net income of $40,000, subtract cash dividends of $8,000, add issued stock of $60,000, and subtract treasury stock purchase of $12,000. The stock dividend does not affect total equity as it is a reclassification within equity. Total: $340,000 + $40,000 - $8,000 + $60,000 - $12,000 = $420,000.

A Company Reported Total Stockholders' Equity of $340,000 on Its