Question

in 2022 (the company's first year of business), fleetwood mac issued 1,000 shares of $2 par common stock for $30 per share. on march 1st the company repurchased 50 shares of their own common stock for $50 per share. finally the company earned $20,000 of net income in 2022. what is the total stockholders' equity balance at the end of 2022.

Answer 1

The total stockholders' equity balance at the end of 2022 for Fleetwood Mac is $47,500.

Step-by-step explanation:

To calculate the total stockholders' equity balance at the end of 2022, we need to consider the transactions and the net income of Fleetwood Mac for the year.

1. Issued shares of $2 par common stock: 1,000 shares x $30 = $30,000
2. Repurchased shares: 50 shares x $50 = $2,500
3. Net income: $20,000

To calculate the total stockholders' equity balance, we need to subtract the repurchased shares from the issued shares and add the net income. So, the total stockholders' equity balance at the end of 2022 would be:

Total stockholders' equity = Issued shares - Repurchased shares + Net income
Total stockholders' equity = $30,000 - $2,500 + $20,000 = $47,500