Harbottle Corporation was organized on January 3, 2008, with authorized capital

ID: 2423780 • Letter: H

Question

Harbottle Corporation was organized on January 3, 2008, with authorized capital of 100,000 shares of $10 par common stock. During 2008, Harbottle had the following transactions affecting stockholders' equity: • January 7--Issued 40,000 shares at $12 per share • December 2--Purchased 6,000 shares of treasury stock at $13 per share The cost method was used to record the treasury stock transaction. Harbottle's net income for 2008 is $300,000. What is the amount of stockholders' equity at December 31, 2008?

$640,000

$702,000

$708,000

$720,000

Explanation / Answer

Jan-07

Issue 40000 share 12 per share

Common stock (10*40000)

400000

Common Stock Premium (2*40000)

80000

Dec-02

Purchased 6000 share 13 per share

Common stock (10*6000)

-60000

Common stock premium(3*6000)

-18000

2008

Net Income for 2008

Retained earning

300000

Share holder's Equity at December, 31 2008

702000