Question

On January 1, ABC started the year with a $400,000 balance in Retained Earnings and a $550,000 balance in Common Stock. During the year, the company reported net loss of $25,000, paid a dividend of $15,000, and issued more common stock for $30,500. What is total stockholders' equity at the end of the year? (just type numbers)

Answer 1

$940,500

Step-by-step explanation:

Stockholders equity , also known as shareholders equity is defined as the sum of the remaining assets for an organization after all liabilities have been paid.

The components of stockholders equity are retained earning ,treasury stock , shares , additional paid in capital and the sub components,

The sub components are the other items of assets and liabilities that could impact the above mentioned component.

Workings

Retained earnings -400,000

Common stock - 550,000

Net loss - (25,000) (Retained earning is affected)

Dividends paid (15,000) (retained earning affected)

New stock 30,500 (common stock increase)

total 940,500