Asked by
Haley Skiados
on Oct 27, 2024
Verified
A company reported total stockholders' equity of $540,000 on its balance sheet dated December 31,2018.During the year ended December 31,2019,the company reported net income of $60,000,declared and paid a cash dividend of $18,000,declared and distributed a 10% stock dividend with a $15,000 total market value,issued additional common stock for $70,000,and resold treasury stock for $15,000 that it had purchased in 2018 for $12,000.What is total stockholders' equity as of December 31,2019?
A) $640,000.
B) $670,000.
C) $667,000.
D) $655,000.
Stockholders' Equity
The residual interest in the assets of a corporation that remains after deducting its liabilities; also known as shareholders' equity.
Cash Dividend
The allocation of a part of a company's profits to its shareholders, approved by the board of directors, and typically dispensed in the form of cash.
Stock Dividend
A dividend payment made in the form of additional shares rather than a cash payout, representing a reinvestment of a company’s earnings.
- Identify the effects of issuing common and preferred stock on total stockholders' equity.
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Learning Objectives
- Identify the effects of issuing common and preferred stock on total stockholders' equity.