Question

Zinc Co.’s adjusted trial balance at December 31, Year 6, 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 holding loss on available-for-sale securities 20,000 Retained earnings: Appropriated for uninsured earthquake losses 150,000 Retained earnings: Unappropriated 200,000 What amount should Zinc report as total equity in its December 31, Year 6, balance sheet?a. $1,680,000

b. $1,720,000
c. $1,780,000
d. $1,820,000

Answer 1

a. $1,680,000

Step-by-step explanation:

The computation of the total equity is shown below:

= Common stock + Additional paid-in capital + Appropriated for uninsured earthquake losses retained earnings + Unappropriated retained earnings - treasury stock - Net unrealized holding loss on available-for-sale securities

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

= $1,750,000 - $70,000

= $1,680,000