Question

​Milton, Inc. had the following transactions in​ 2019, its first year of​ operations: bullet Issued 14 comma 000 shares of common stock. Stock has par value of $ 0.01 per share and was issued at $ 30.00 per share. bullet Earned net income of $ 300 comma 000. bullet Paid dividends of $ 12.00 per share. At the end of​ 2019, what is total​ stockholders' equity?

Answer 1

$552,000

Step-by-step explanation:

The total stockholders equity is the cash received from share issued plus the net income earned in the year less dividends paid

cash received from shares issued=$30*14,000=$420,000

net income is $300,000

dividends paid =$12*14,000=$168,000

total shareholders' equity=$420,000+$300,000-$168,000=$552,000

The balance left in shareholders' equity is $552,000 after dividends of $168,000 have been paid in respect of 14,000 common stock