Stanton Company has the following items: common stock, $720,000; treasury stock, $85,000; deferred taxes, $100,000 and retained earnings, $363,000.What total amount should Stanton Company report as stockholders' equity?
A)$898,000.
B)$998,000.
C)$1,098,000.
D)$1,198,000.

Question

Quizplus · Accepted Answer

Stockholders' equity is calculated as common stock plus retained earnings minus treasury stock. Therefore, $720,000 (common stock) + $363,000 (retained earnings) - $85,000 (treasury stock) = $998,000. Deferred taxes are not included in stockholders' equity.

Stanton Company Has the Following Items: Common Stock, $720,000; Treasury