Question

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: $10,000. $13,000. $12,000. $8,000

Answer 1

Answer:

The total amount of stockholders' equity is: $10,000

Explanation:

The accounts and values included in stockholders' equity are:

• Common stock           4,000 (1)
• Paid in capital             4,000 (2)
• Treasury stock           -1,000 (3)
• Retained earnings     3,000 (4)

Total stockholders' equity  10,000

1 - Nominal value of outstanding shares.

2- Difference between the price paid by stockholders when shares were issued and nominal value.

3- Shares recovered by the company.

4- Earning accumulated by the company.