Chegg "Thurman Corporation issued 500,000 shares of $0.50 par value capital stock at its date of incorporation for cash at a price of $2.5 per share. During the first year of operations, the company earned $180,000 and declared a dividend of $45,000. At the end of this first year of operations, the balance of the Common Stock account is:"

Question

Spud

Business

13 May, 01:56

Chegg "Thurman Corporation issued 500,000 shares of $0.50 par value capital stock at its date of incorporation for cash at a price of $2.5 per share. During the first year of operations, the company earned $180,000 and declared a dividend of $45,000. At the end of this first year of operations, the balance of the Common Stock account is:"

+5

Answers (1)

Know the Answer?

Laney Montgomery · Answer 1

The balance of the Common Stock account i at the end of the first year of operations is $ $1,385,000

Explanation:

Solution

Given that:

The common stock that was issued is = 500,000 shares * $ 2.5 shares = $1250000

Thus,

The company gained or earned = $180,000

The less Dividend paid is = $45,000

The end balance stock of the Corporation is given as:

The issued stock + The company gain - The divvied paid (Less)

=$1250000 + $180,000 - $45,000

= $1430000 - $45,000

= $1,385,000