Question

The stockholders' equity account balances of ABC Company at
January 1, 2020 are given below:

                                        January 1, 2020
Common stock .........................       658,000
Paid-in capital – common stock .......       423,000
Treasury stock .......................       256,000
Paid-in capital – treasury stock .....        18,000
Retained earnings ....................       425,000

The common stock account at January 1 consisted of 31,000
shares that were outstanding at a $14 par value per share.

The treasury stock account at January 1 consisted of 16,000
shares of common stock that had been re-acquired at a $16
cost per share.

During January, ABC entered into the following transactions:

January 11:   Re-issued 4,300 of the treasury shares for
              $25 per share

January 19:   Issued 7,000 shares of previously un-issued
              common stock for $25 per share

January 28:   Declared and paid a $2.30 dividend per share
              on the outstanding shares of common stock

ABC Company reported a net income of $120,000 for January.

Calculate the amount of ABC Company's total stockholders'
equity at January 31, 2020.

Answer 1

Computation of gain on sale of treasury stock:
Reissue of treasury stock on Jan 11:
Reissue price (4300*25)	1,07,500
Less: Cost (4300*16)		68,800
Gain credited to Paid in capital	38,700
Stockholder's equity:
Common Stock (47000+7000)*14	7,56,000
Paid in capital -Common Stock (423000+7000*11)	5,00,000
Treasury Stock (16000-4300)shares*16	1,87,200
Paid in Capital_treasury (18000+38,700)	56,700
Retained earnings			4,47,710
(425,000+120,000-42300*2.30)
Total Stockholder's equity		1947610