Question

Broadbean Co. had the following amounts on its balance sheet on December 31, 2018: Common stock and Additional paid in capital $ 106,000 Retained earnings 642,000 Treasury stock 82,000 Accumulated other comprehensive income (loss) $ (25,000 ) During 2019, Broadbean Co. reported net income of $46,200, declared cash dividends of $31,800, purchased additional treasury stock for $8,400, and experienced a foreign currency translation gain of $3,600. What amount will Broadbean report as total stockholders’ equity at December 31, 2019 on its statement of stockholders’ equity? Multiple Choice

Answer 1

The total stockholders' equity at December 31, 2019, on Broadbean Co.'s statement of stockholders' equity will be $735,600.

Step-by-step explanation:

The total stockholders' equity at December 31, 2019, on Broadbean Co.'s statement of stockholders' equity can be calculated by considering the various transactions that occurred during the year. Here's how you can calculate it:

1. Start with the beginning balance of common stock and additional paid-in capital, which is $106,000.
2. Add the net income for the year, which is $46,200.
3. Add the foreign currency translation gain, which is $3,600.
4. Subtract the cash dividends declared, which is $31,800.
5. Subtract the purchase of additional treasury stock, which is $8,400.
6. Finally, add the beginning balance of retained earnings, which is $642,000, and the beginning balance of accumulated other comprehensive income (loss), which is $(25,000).

Using the given amounts, the total stockholders' equity at December 31, 2019, will be $735,600.

Answer 2

$650,600

Step-by-step explanation:

Stockholders’ equity as at December 31, 2019

Common stock and Additional paid in capital $106,000

Retained earnings {642000+46200-31800] $656,400

Less: Treasury stock [82000+8400] $90,400

Accumulated other comprehensive income ($21,400)

(loss) [(25000)+3600]

Stockholders’ equity $650.600