Ask Question
12 February, 01:04

Ellsworth Corporation was organized on January 1, 2016. The firm was authorized to issue 150,000 shares of $1 par common stock. During 2016, Ellsworth had the following transactions relating to shareholders' equity:Issued 20,000 shares of common stock at $7 per share. Issued 20,000 shares of common stock at $8 per share. Reported a net income of $100,000. Paid dividends of $50,000. Purchased 3,000 shares of treasury stock at $10. What was total shareholders' equity at the end of 2016? a. $270,000. b. $350,000. c. $320,000. d. $380,000.

+2
Answers (1)
  1. 12 February, 01:13
    0
    c. $320,000

    Explanation:

    The computation of the total shareholders' equity is shown below:

    Issued amount $140,000 (20,000 shares * $7)

    Issued amount $160,000 (20,000 shares * $8)

    Add: Reported Net income $100,000

    Less : Dividend paid - $50,000

    Less: Treasury stock - $30,000 (3,000 shares * $10)

    Total shareholder equity $320,000

    We deduct the dividend and the treasury stock and rest of the items are added
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Ellsworth Corporation was organized on January 1, 2016. The firm was authorized to issue 150,000 shares of $1 par common stock. During ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers