The following information was obtained from the David Corporation\'s September f
ID: 2405395 • Letter: T
Question
The following information was obtained from the David Corporation's September financial statements. Determine the company's total stockholders' equity on September 30.
Income Statement
Revenues
Expenses
$95,000
Net Income
$160,000
Statement of Retained Earnings
Beginning Balance
$300,000
Net Income
Subtotal
Dividends
$25,000
Ending Balance
Balance Sheet
Assets
Liabilities
$665,000
Stockholders' Equity
Common Stock
$900,000
Retained Earnings
Total Stockholders' Equity
?????????
Total Liabilities and Stockholders' Equity
$2,000,000
$1,200,000
$1,335,000
$1,565,000
$1,100,000
Income Statement
Revenues
Expenses
$95,000
Net Income
$160,000
Statement of Retained Earnings
Beginning Balance
$300,000
Net Income
Subtotal
Dividends
$25,000
Ending Balance
Balance Sheet
Assets
Liabilities
$665,000
Stockholders' Equity
Common Stock
$900,000
Retained Earnings
Total Stockholders' Equity
?????????
Total Liabilities and Stockholders' Equity
$2,000,000
Explanation / Answer
The correct answer is B $1,335,000
Total stock holder equity = common stock + closing retained earnings
Closing retained earnings = opening retained earnings + net income for year - dividend
$300,000+$160000-$25000= $435000
Common stock = $900,000
Total shareholders equity= $900,000+$435000=$ 1,335,000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.