Orlando Corporation incorporated on January 2 of the current year. During the year, Orlando had the following transactions: times issued 40 comma 000 shares of common stock at $ 35 per share. The par value per share is $1. times purchased 4 comma 000 shares of treasury stock at $ 28 per share times had net income of $400,000. What is the total amount of stockholders' equity as of December 31 of the current year?

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Business

Allyson

1 April, 09:39

Orlando Corporation incorporated on January 2 of the current year. During the year, Orlando had the following transactions: times issued 40 comma 000 shares of common stock at $ 35 per share. The par value per share is $1. times purchased 4 comma 000 shares of treasury stock at $ 28 per share times had net income of $400,000. What is the total amount of stockholders' equity as of December 31 of the current year?

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Tipr · Answer 1

The total amount of stock holder's equity will be $1,688,000.

Explanation:

The number of common shares issued in common stock is 40,000.

The price per stock is $35.

The par value per share is $1.

The amount of treasury shares purchased is 4,000.

The price of treasury stock is $28 per share.

The net income is given at $400,000.

The value of common shares at par value is $40,000.

The paid-in capital excess of par value is

=$40000 * (35-1)

=$40000*34

=$1,360,000

The expense on treasury shares

=4,000*$28

=$112,000

The total amount of stock holder's equity will be,

=common shares at par value+paid in capital excess of par value+retained earnings-expense on treasury shares

=$ (40,000+1,360,000+400,000-112,000)

=$1,688,000