Prom Night Formal Wear has the following stockholders' equity accounts at December 31, 2018: Common Stock, $1 par value, 1,200,000 shares; Additional Paid-in Capital, $20 million; Retained Earnings, $15 million; and Treasury Stock, 40,000 shares, $1.60 million. Prepare the stockholders' equity section of the balance sheet. (Enter your answers in dollars, not in millions. Amounts to be deducted should be indicated with a minus sign.)

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Business

Izaiah Lucas

8 May, 16:18

Prom Night Formal Wear has the following stockholders' equity accounts at December 31, 2018: Common Stock, $1 par value, 1,200,000 shares; Additional Paid-in Capital, $20 million; Retained Earnings, $15 million; and Treasury Stock, 40,000 shares, $1.60 million. Prepare the stockholders' equity section of the balance sheet. (Enter your answers in dollars, not in millions. Amounts to be deducted should be indicated with a minus sign.)

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Marely Lee · Answer 1

Answer and Explanation:

The preparation of the stockholder equity section of the balance sheet is shown below:

Common stock ($1 * 1,200,000 shares) $1,200,000

Add: Additional paid in capital $20,000,000

Add: Retained earnings $15,000,000

Less: Treasury stock $1,600,000

Stockholder equity $34,600,000

We simply added the all items except the treasury stock as it should be deducted