In 2015, its first year of operations Chesapeake Company had the following trans
ID: 2446510 • Letter: I
Question
In 2015, its first year of operations Chesapeake Company had the following transactions in 2015. • Issued 20,000 shares of common stock. Stock has par value of $1.00 per share and was issued at $14.00 per share. • Issued 1,000 shares of $100 par value preferred stock. Shares were issued at par. • Earned net income of $35,000. • Paid no dividends. • Paid Accounts Payable of $10,215 • Purchased a truck for $10,000. Signed a 5 year promissory note for the entire amount • Hired a new Vice President on December 15 for a salary of $100,000. The Vice President begins employment on January 3, 2016 At the end of 2015, what is the total amount of stockholders' equity? A) $415,000 B) $120,000 C) $260,000 D) $380,000
Explanation / Answer
a) $415,000
Total Shareholders Equity= Commonstock+prefered stock+net income
=(14*20000)+(100*1000)+35000
=415,000
Other transactions doesnot have affect on Equity.
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