Question

Olmstead Company has the following items: common stock $950,000; treasury stock, $105,000; deferred income taxes $125,000 and retained earnings, $454,000. What total amount should Olmstead Company report as stockholder's equity?

Answer 1

To calculate the total amount of stockholder's equity for Olmstead Company, we add the common stock, treasury stock, deferred income taxes, and retained earnings together. In this case, the total stockholder's equity is $1,634,000.

Step-by-step explanation:

To calculate the total amount of stockholder's equity for Olmstead Company, we add the common stock, treasury stock, deferred income taxes, and retained earnings together. In this case, the common stock is $950,000, the treasury stock is $105,000, the deferred income taxes are $125,000, and the retained earnings are $454,000. Adding these amounts together, we get:

Total Stockholder's Equity = Common Stock + Treasury Stock + Deferred Income Taxes + Retained Earnings

Total Stockholder's Equity = $950,000 + $105,000 + $125,000 + $454,000

Total Stockholder's Equity = $1,634,000