Question

Stockholders’ equity totaled $94,000 at the beginning of the year. During the year, net income was $24,000, dividends of $9,000 were declared and paid, and $22,000 of common stock was issued at par value.

Required Calculate total stockholders' equity at the end of the year. (Deductible amounts should be indicated by a minus sign) Stockholders Equity Changes 29,000 Ending 29,000

Answer 1

The total stockholders' equity at the end of the year is $131,000

Step-by-step explanation:

The computation of the ending stockholder equity balance is shown below:

= Beginning stockholder equity balance + Net income - dividend paid + issue of common stock

= $94,000 + $24,000 - $9,000 + $22,000

= $131,000

The dividend should decrease the balance of the stockholder equity, so we deduct this and the remaining items should be added because it increases the shareholder value.