What is the total stockholders' equity based on the following account balances?
Common Stock
$450,000
Paid-In Capital in Excess of Par
90,000
Retained Earnings
190,000
Treasury Stock
10,000
Answer
A.$740,000
B.$730,000
C.$720,000
D.$640,000
450,000 + 90,000 + 190,000 - 10,000
730, 000 - 10,000 =$ 720,000
To find the total stockholders' equity based on the given account balances, we need to add up the common stock, paid-in capital in excess of par, retained earnings, and subtract the treasury stock.
Calculating the total stockholders' equity:
Common Stock: $450,000
Paid-In Capital in Excess of Par: $90,000
Retained Earnings: $190,000
Treasury Stock: $10,000
Total Stockholders' Equity = Common Stock + Paid-In Capital in Excess of Par + Retained Earnings - Treasury Stock
Total Stockholders' Equity = $450,000 + $90,000 + $190,000 - $10,000
Therefore, the total stockholders' equity equals $730,000 (Option B).
To find the total stockholders' equity, you need to sum up the Common Stock, Paid-In Capital in Excess of Par, Retained Earnings, and subtract the Treasury Stock.
Common Stock: $450,000
Paid-In Capital in Excess of Par: $90,000
Retained Earnings: $190,000
Treasury Stock: $10,000
Total Stockholders' Equity = Common Stock + Paid-In Capital in Excess of Par + Retained Earnings - Treasury Stock
Total Stockholders' Equity = $450,000 + $90,000 + $190,000 - $10,000
Total Stockholders' Equity = $720,000
Therefore, the correct answer is C.$720,000.