What is the total stockholders' equity based on the following account balances? Common Stock $1,800,000Paid-In Capital in Excess of Par 120,000Retained Earnings 570,000Treasury Stock 60,000a. $2,190,000. b. $2,430,000. c. $2,550,000. d. $1,680,000.

Question

Jefferson Santana

Business

1 November, 15:54

What is the total stockholders' equity based on the following account balances? Common Stock $1,800,000Paid-In Capital in Excess of Par 120,000Retained Earnings 570,000Treasury Stock 60,000a. $2,190,000. b. $2,430,000. c. $2,550,000. d. $1,680,000.

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Answers (1)

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Skylar Lin · Answer 1

b. $2,430,000

Explanation:

The computation of the total stockholder's equity is shown below:

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

= $1,800,000 + $120,000 + $570,000 - $60,000

= $2,430,000

While computing the total stockholder equity, we deducted the treasury stock as it reduces the balance of equity whereas other items increase the balance of the equity, so we added it.

Hence, all other options are wrong except b. option