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As of December 31, 2023, Ajax Corporation reported the following: Dividends payable $25,000; Treasury stock $900,000;...

As of December 31, 2023, Ajax Corporation reported the following: Dividends payable $25,000; Treasury stock $900,000; Paid-in capital--share repurchase $22,000; Other paid-in capital accounts $4,600,000; Retained earnings $3,010,000.

During 2024, a third of the treasury stock was resold for $240,000; net income was $825,000; cash dividends declared were $1,000,000; and stock dividends of $550,000 were declared and distributed (no fractional shares).Hint: Use a T-account to help you organized these facts.

What would total shareholders' equity be as of December 31, 2024?

Question 8 options:

$6,822,000

$7,997,000

$6,797,000

$6,247,000
Business   Accounting   
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Homework Answers

Answer #1

The correct answer is "$6,797,000" calculated as follows:

First of all, shareholders' equity as on December 31, 2023 = 4,600,000 + 3,010,000 + 22,000 - 900,000

Shareholders' equity as on December 31, 2023 = $6,732,000

Shareholders' equity as on December 31, 2024 = Shareholders' equity as on December 31, 2023 + Net Income + Treasury stock resold - Cash dividends

Shareholders' equity as on December 31, 2024 = 6,732,000 + 825,000 + 240,000 - 1,000,000

Shareholders' equity as on December 31, 2024 = $6,797,000

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