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Having trouble with this problem? Stockholder equity formula?
On January 1, 2012, Gucci Brothers Inc. started the year with a $492,000 balance in retained earnings and a $593,000 balance in common stock. During 2012, the company earned net income of $107,000, paid a dividend of $15,400, and issued more common stock for $20,000. What is total stockholders' equity on December 31, 2012?
3 Answers
- 7 years agoFavorite Answer
The ending balance in Common Stock would be the 593,000+20,000 = 613,000
The paid dividend of 15,400 comes off of the net income so the amount that you are adding to retained earnings for the year is 107,000-15400 = 91,600
So the ending balance in Retained Earnings would be 492,000+91,600 = 583,600
Total stockholders' equity is Common Stock and Retained Earnings - Treasury Shares (which you have none of) so 613,000+583,600 = 1,196,600
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- Anonymous5 years ago
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