As of December 31, 2013, Warner Corporation reported the following: Dividends pa
ID: 2463864 • Letter: A
Question
As of December 31, 2013, Warner Corporation reported the following:
Dividends payable 32,000
Treasury stock 570,000
Paid-in capital – share repurchase 32,000
Other paid-in capital accounts 5,200,000
Retained earnings 4,200,000
During 2014, half of the treasury stock was resold for $250,000; net income was $570,000; cash dividends declared were $1,380,000; and stock dividends declared were $620,000.
What was shareholders' equity as of December 31, 2013?
a- $8,830,000. b- $8,862,000. c- $8,894,000. d- $9,432,000.
Explanation / Answer
Shareholders Equity December 31, 2013 => Other paid-in capital accounts + Retained earnings + Paid-in capital – share repurchase - Treasury stock
=> 5200000 + 4200000 + 32000 - 570000 => $8862000
Shareholders Equity December 31, 2013 => $8862000 ie option B
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