Presented below is the stockholders' equity section of Oaks Corporation at December 31, 2012:

Common stock, par value $20; authorized 75,000 shares; issued and outstanding 45,000 shares $ 900,000Paid-in capital in excess of par value 250,000Retained earnings 300,000$1,450,000During 2013, the following transactions occurred relating to stockholders' equity:3,000 shares were reacquired at $28 per share. 3,000 shares were reacquired at $35 per share. 1,800 shares of treasury stock were sold at $30 per share.

For the year ended December 31, 2013, Oaks reported net income of $450,000. Assuming Oaks accounts for treasury stock under the cost method, what should it report as total stockholders' equity on its December 31, 2013, balance sheet?

a. $1,765,000.

b. $1,761,400.

c. $1,757,800.

d. $1,315,000.

Question

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4 March, 09:08

Presented below is the stockholders' equity section of Oaks Corporation at December 31, 2012:

Common stock, par value $20; authorized 75,000 shares; issued and outstanding 45,000 shares $ 900,000Paid-in capital in excess of par value 250,000Retained earnings 300,000$1,450,000During 2013, the following transactions occurred relating to stockholders' equity:3,000 shares were reacquired at $28 per share. 3,000 shares were reacquired at $35 per share. 1,800 shares of treasury stock were sold at $30 per share.

For the year ended December 31, 2013, Oaks reported net income of $450,000. Assuming Oaks accounts for treasury stock under the cost method, what should it report as total stockholders' equity on its December 31, 2013, balance sheet?

a. $1,765,000.

b. $1,761,400.

c. $1,757,800.

d. $1,315,000.

+2

Answers (1)

Know the Answer?

Harper Leblanc · Answer 1

a. $1,765,000

Explanation:

Total stockholder's equity on December 31, 2013 = Total equity at end 2012 - amount paid for 3,000 shares were reacquired at $28 per share - amount paid for 3,000 shares were reacquired at $35 per share + amount collect from 1,800 shares of treasury stock were sold at $30 per share + net income of $450,000

= $1,450,000 - 3,000 * $28 - 3,000 * $35 + 1,8000 * $30 + $450,000 = $1,765,000