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19 July, 22:04

What is the total stockholders' equity based on the following account balances? Common Stock $500,000 Paid-In Capital in Excess of Par-Common Stock 50,000 Retained Earnings 190,000 Treasury Stock 40,000 a.$630,000 b.$700,000 c.$740,000 d.$780,000

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  1. 19 July, 22:32
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    b.$700,000

    Explanation:

    The total stockholders' equity shall be determined thorugh the following mentioned formula:

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

    In this question

    Common Stock=$500,000

    Paid-In Capital in Excess of Par=$50,000

    Retained Earnings=$190,000

    Treasury Stock=$40,000

    Stockholders' equity=$500,000+$50,000 + $190,000-$40,000

    =$700,000

    So based on the above calculations, the answer shall be b.$700,000
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