00o and Pald-in Capital in Excess r 85. Presented below is the stockholders egui

Question

00o and Pald-in Capital in Excess r 85. Presented below is the stockholders eguity section of Oaks Corp Common stock, par value $20; authorized 75,000 shares Corporation at December 31, 2016: 20 $ 900,000 350,000 Paid-in capital in excess of par value Paid-in capitalin estanding 45,000 shares 45coe 300,000 $1,550.000 Retained earnings uring 2017, 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. 1.0 shares of treasury stock (the ones purchased at $28 per share) were sold at $30 per share f $450,000. Assuming Oaks For the year ended December 31, 2017, Oaks reported net income o accounts for treasury stock under the cost method, what should it report as total stockholders ed its December 31, 2017, balance sheet? a. $1,865,000 b. $1,861,400 c. $1,857,800 d. $1,415,000.

Explanation / Answer

The correct answer is option (a) i.e. $1,865,000 which is calculated as below:- Shareholder's equity at December 2016 1,550,000 Add : Net Income      450,000 Treasury Stock Purchased 3,000 shares (3,000*28)      (84,000) Purchased 3,000 shares (3,000*35)    (105,000) Sold 1,800 shares (1,800 *30)        54,000 Shareholder's equity at December 2017 1,865,000

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