August,Inc.had the following transactions in 2018,its first year of operations: • Issued 22,000 shares of common stock.The stock has a par value of $3.00 per share and was issued at $16.00 per share.
• Issued 1800 shares of $160 par value preferred stock at par.
• Earned net income of $37,000.
• Paid no dividends.
At the end of 2018,what is total stockholders' equity?
A) $677,000
B) $354,000
C) $286,000
D) $640,000

Question

Quizplus · Accepted Answer

The total stockholders' equity is calculated by adding the common stock, preferred stock, and net income. Common stock is 22,000 shares * $16 = $352,000. Preferred stock is 1,800 shares * $160 = $288,000. Net income is $37,000. Total stockholders' equity = $352,000 + $288,000 + $37,000 = $677,000.