Question

Company A was organized at the start of 2021. The company was authorized to issue 20,000 shares of $1 par common stock. During 2021, the company had the following transactions related to shareholders' equity:

• Issued 236 of common stock at $8 per share
• Issued 287 of common stock at $2 per share
• Reported net income of $1,524
• Paid dividends of $320
• Purchased 26 shares of treasury stock at $11

What was total shareholders' equity at the end of 2021? Do not include dollar signs.

Answer 1

Answer: 3,380

Calculations:

Stockholders' Equity
Paid-in capital:
Common stock [(236 x $1 par) + (287 x $1 par)]	523
Paid-in capital in excess of par-Common [(236 x ($8-$1)) + (287 x($2- $1r)]	1,939
Total paid-in capital	2,462
Retained earnings [$1,524 net income - $320 Div.]	1,204
Total paid-in capital and Retained earnings	3,666
Less: Treasury stock [26 x $11]	-286
Total stockholders' Equity at the end of 2021	3,380