Question

Jay Co. reported the following financial data for its most current year: Beginning-of-year common stock $105,000 Beginning-of-year retained earning 175,400 Net Income 33,400 Dividends Paid 10,500 Issuance of common stock 24,000 Compute Jay’s end-of-year total stockholders’ equity.

Answer 1

Answer:

The correct answer would be $327,300.

Explanation:

In order to calculate end of year stockholders equity following equation is used.

Stockholders equity =  Year end common stock + year end retained earnings - treasury stocks.

Since, there are no treasury stocks in this case, we just need to get year end common stock value and retained earnings.

To calculate year end stock value we just add beginning balance of stock to any other stock issuance value during the year which in this case would be:

105,000 + 24,000 = 129,000

Whereas, to calculate year end retained earnings, we take beginning balance add net income and subtract any dividend paid. Calculation in this case would be:

175,400 + 33,400 - 10,500 = 198,300

So, stockholder equity = 129,000 + 198,300 = 327,300.