3. Moretown, Inc. had the following transactions in 2017, its first year of oper

Question

3. Moretown, Inc. had the following transactions in 2017, its first year of operations 1. Issued 38,000 shares of common stock. Stock has par value of $1.00 per 2. Earned net income of $75,00o. 3. Paid no dividends. At the end of 2017, what is total stockholders' equity? share and was issued at $20.00 per share O A. $760,000 @ B, $75,000 C. $835,000 D. $38,000 4. Lerner, Inc. had the following transactions in 2017, its first year of operations: 1. Issued 25,000 shares of common stock. The stock has a par value of $3.00 per share and was issued at $16 share. 2. Issued 1,700 shares of $170 par value preferred stock at par. 244- 3. Earned net income of $40,000. 4. Paid no dividends. At the end of 2017, what is total stockholders' equity? A. $364,000 B. $689,000 $325,000 D. $729,000 O c

Explanation / Answer

3. Calculate total stockholder's equity :

so answer is c) $835000

4. Calculate total stockholder's equity :

so answer is d) $729000

Common stock 38000 Additional paid in capital 722000 Total paid in capital 760000 Net income 75000 Total stockholder's equity 835000

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