Question

On january 1, 2022 gucci brothers inc. Had a $500,000 credit balance in retained earnings and $600,000 balance in common stock. During 2022, the company earned net income of $100,000, declared a dividend of $15,000, and issued additional stock for $25,000. What is total stockholders’ equity on december 31, 2022?.

Answer 1

The total stockholders' equity on December 31, 2022, will be equal to $1,210,000.

What do you mean by stockholders equity?

Stockholders' Equity is also known as shareholders' equity. It is calculated both as a firm's total assets much less its total liabilities or as an alternative as the sum of proportion Capital and retained Earnings much less treasury shares.

As per the information,

Stockholders Equity = Common Stock + Retained Earnings

Stockholders Equity = ($600,000 + $25,000) +  ($500,000 + $100,000 -$15,000)

Stockholders Equity = $1,210,000

Hence, The total stockholders' equity on December 31, 2022, will be equal to $1,210,000.

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