Question

As of December 31, 2021, Warner Corporation reported the following:

Cash dividends payable $20,000
Treasury stock 600,000
Paid-in capital—share repurchase 20,000
Common stock and other paid-in capital accounts 4,000,000
Retained earnings 3,000,000
What was shareholders' equity as of December 31, 2021?

Answer 1

$6,240,000

Step-by-step explanation:

Stockholders Equity Includes the Add-in-capital par value, Add-in-capital excess value of Common and Preferred, Net income accumulated value and dividends.

Stockholders' equity

Common Stock and Paid-in-capital common $4,000,000

Retained Earning $3,000,000

Treasury Stock ($600,000)

Paid-in capital—share repurchase $20,000

Total stockholders' equity $6,420,000

Treasury stock is the repurchased stock, which is a contra equity account. It need to be deducted from the equity