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28 November, 00:11

On January 1, 2012, two individuals invested $200,000 each to form Reiner Corporation. Reiner had total revenues of $20,000 during 2012 and $50,000 during 2013. Total expenses for the same periods were $12,000 and $36,000 respectively. Cash dividends paid out to stockholders totaled $6,000 in 2012 and $10,000 in 2013. What was Reiner's total stockholders' equity at the end of 2012 and 2013

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  1. 28 November, 00:40
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    2012 $402,000

    2013 $410,000

    Explanation:

    Reiner Corporation

    2012 Stockholders Equity:

    Revenues ($20,000) - Expenses ($12,000) = Net Income ($8,000)

    0 + $8,000 - $6,000 = ($400,000 CC) $402,000

    2013 Stockholders Equity:

    $50,000 - $36,000 = $14,000

    $6,000 + $14,000 - $10,000 = ($400,000 CC) $410,000

    Therefore Reiner's total stockholders' equity at the end of 2012 is $402,000 and 2013 is $410,000

    Note: since two individuals invested $200,000 each hence 2 * $200,000 = $400,000
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