Question

What is the total stockholders' equity based on the following account balances?Common Stock $1,300,000Paid-In Capital in Excess of Par 100,000Retained Earnings 360,000Treasury Stock 60,000a. $1,400,000.b. $1,820,000.c. $1,760,000.d. $1,700,000.

Answer 1

Answer:

d. $1,700,000.

Explanation:

The computation of the total stockholder's equity is shown below:

= Common Stock + Paid-In Capital in Excess of Par + Retained Earnings - Treasury Stock

= $1,300,000 + $100,000 + $360,000 - $60,000

= $1,700,0000

While computing the total stockholder equity, we deducted the treasury stock as it reduces the balance of  equity whereas other items increase the balance of the equity, so we added it