This course 2-Part2 Roberto Corporation was organized on January 1,2018. The fir

Question

This course 2-Part2 Roberto Corporation was organized on January 1,2018. The firm was authorized to issue 100,000 shares of $5 par common stock During 2018, Roberto had the following transactions relating to shareholders' equity Issued 10,000 shares of common stock at $8 per share. Issued 20,000 shares of common stock at $7 per share. Reported a net income of $100,000. Paid dividends of $50,000. Purchased 7,000 shares of treasury stock at $10 (part of the 20,000 shares issued at $7) What is the total shareholders' equity at the end of 2018? Belect one: A. $250,000. B. $200,000. C. $270,000. D. $300,000. O

Explanation / Answer

Ans. B

Issue of stock = 10,000 × $8.00 = $80,000

Issue of stock = 20,000 × $7.00 = $140,000

Net income = $100,000

Dividends = $(50,000)

Treasury stock = 7,000 × $10.00 = $(70,000)

Total shareholders equity = $200,000

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