Winshare Art Company has issued only common stock. Currently it has 10,000 shares outstanding. The value of the stock is shown as $20 per share. In addition, $100,000 of Winshare's earnings have been reinvested in the business since it was founded. What is Winshare's total owners' equity?
A) $300,000
B) $200,000
C) $100,000
D) $2,000,000
E) $100,020

Question

Quizplus · Accepted Answer

The total owners' equity can be calculated by adding the value of the outstanding shares to the earnings reinvested in the business. The value of the outstanding shares is 10,000 shares * $20/share = $200,000. Adding the reinvested earnings of $100,000 gives a total of $300,000.

Winshare Art Company Has Issued Only Common Stock