Question

At the end of the accounting period, Houston Company had $12,000 of par value common stock issued, additional paid in capital of $11,000, retained earnings of $12,000, and $4,000 of treasury stock. The total amount of stockholders' equity is:

A: $31,000

B: $37,000

C: $39,000

D: $19,000

Answer 1

Answer:

The correct answer is A that is $31,000.

Explanation:

The aggregate amount of stockholders' equity is computed as:

Stockholders' equity = Common Stock + Additional paid in capital in excess of par value + Retained Earnings - Treasury Stock

where

Common Stock = $12,000

Additional paid in capital in excess of par value = $11,000

Retained Earnings = $12,000

Treasury Stock = $4,000

Putting the values in the above formula:

= $12,000 + $11,000 + $12,000 - $4,000

= $31,000

Therefore, the amount of Stockholders' equity is $31,000.