Question

Oriole Company has the following items: common stock, $1610000; treasury stock, $217000; deferred income taxes, $254000 and retained earnings, $782000. What total amount should Oriole Company report as stockholders’ equity?

Answer 1

Answer:

Stockholders' equity = $ 2,175,000.

Explanation:

Stockholders' equity is also the corporation's total book value. In other word, it is the amount of difference between the Corporation Asset and its liability

Stockholders' equity for Oriole company can be derived using : Common stock + Retained earnings - Treasury stock

Stockholders' equity = 1,610,000 + 782,000 - 217,000

Stockholders' equity = $ 2,175,000.

We also need to know that deferred income taxes is not a component of stockholders' equity thus it will not be considered in stockholders' equity calculation.

Correct answer is $ 21,75,000.