Question

Bonita Corporation’s December 31, 2018 balance sheet showed the following:

8% preferred stock, $10 par value, cumulative, 20300shares
authorized; 15300 shares issued $ 153000
Common stock, $10 par value, 2080000 shares authorized;
2030000 shares issued, 2010000 shares outstanding 20300000
Paid-in capital in excess of par—preferred stock 59000
Paid-in capital in excess of par—common stock 25000000
Retained earnings 7600000
Treasury stock (208000 shares) 655200

Bonita’s total stockholders’ equity was

$45436800.

$53112000.

$52456800.

$53716800.

Answer 1

$52,456,800

Explanation:

For computation of total stockholders’ equity first we need to find out the total capital stock and total paid in capital which is shown below:-

Total Capital stock = Preferred stock + Common stock

= $153,000 + $20,300,000

= $20,453,000

Total Paid in capital = Paid in capital in excess of par of common stock + Paid in capital in excess of par of preferred stock

= $25,000,000 + $59,000

= $25,059,000

Total stockholder equity = Total Capital stock + Total Paid in capital + Retained earning - Treasury stock

= $20,453,000 + $25,059,000 + $7,600,000 - $655,200

= $52,456,800 - $655,200

= $52,456,800

Therefore for computing the total stockholder equity we applied the above formula.