Question

Zinc Co.'s adjusted trial balance at December 31, 2017 includes the following account balances:

Common stock, $3 par $600,000
Additional paid-in capital 800,000
Treasury stock, at cost 50,000
Net unrealized loss on non-current marketable equity securities 20,000
Retained earnings: appropriated for uninsured earthquake losses 150,000
Retained earnings: unappropriated 200,000
What amount should Zinc report as total stockholders' equity in its December 31, 2017 balance sheet?

Answer 1

Zinc Co. should report a total of $1,680,000 as stockholders' equity in its December 31, 2017 balance sheet. This value is calculated by summing the common stock, additional paid-in capital, appropriated and unappropriated retained earnings, and then subtracting the treasury stock and net unrealized loss on marketable securities.

Step-by-step explanation:

To calculate Zinc Co.'s total stockholders' equity as of December 31, 2017, we would sum the balances of common stock, additional paid-in capital, and both appropriated and unappropriated retained earnings, and then subtract the treasury stock and the net unrealized loss on non-current marketable equity securities.

Adding the amounts, we get:

$600,000 + $800,000 + $150,000 + $200,000 - $50,000 - $20,000 = $1,680,000

Therefore, the total stockholders' equity reported on the balance sheet would be $1,680,000.