Question

On January 1, Gucci Brothers Inc. started the year with a $492,000 balance in Retained Earnings and a $605,000 balance in Common Stock. During the year, the company earned net income of $92,000, paid a dividend of $15,200, and issued more common stock for $27,500. What is total stockholders' equity at the end of the year?

Answer 1

Answer:

Ending stockholders equity 1,200,500

Explanation:

$Beginning Retained Earnings +/- Net Income/Loss - Dividends Equals Ending Retained Earning$

492,000 beginning RE

+92,000 retained earnings

-15,200 dividends

568,000 Ending RE

605,000 + 27,500 = 632,500 Ending Common Stock

632,500 + 568,000 = 1,200,500