What is the total stockholders' equity based on the following account balances?

Common Stock $1,800,000

Paid-In Capital in Excess of Par 100,000

Retained Earnings 360,000

Treasury Stock 60,000

a. $1,900,000.

b. $2,320,000.

c. $2,260,000.

d. $2,200,000.

d. $2,200,000.

Explanation:

Stockholders' Equity is the residual interest in the Assets of the firm after deducting its Liabilities.

The additional Paid-in Capital and Common Stock are both related. Basically, when a firm issues stock it has the par value going into the common stock and then any additional amount that the firm gets from the equity issuance is the additional paid in capital.

Treasury Stock is the stocks that firm buys back some of its own stock and this is contra equity account.

Retained Earnings is just all the profits that the firm has kept and not paid out as dividends.

Stockholders' Equity:

(+) Common Stock $1,800,000

(+) Paid in Capital in Excess of Par $100,000

(+) Retained Earnings $360,000

(-) Treasury Stock $60,000

Stockholders' Equity $2,200,000

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