question 33 2.5 pts\non january 1, abc company started the year with a $250,000 balance in retained earnings…

question 33 2.5 pts\non january 1, abc company started the year with a $250,000 balance in retained earnings and a $300,000 balance in common stock. during the year, the company reported net income of $90,000, paid a dividend of $20,000, issued more common stock for $40,000, and borrowed $60,000 from the bank. what is total stockholders equity at the end of the year?

question 33 2.5 pts\non january 1, abc company started the year with a $250,000 balance in retained earnings and a $300,000 balance in common stock. during the year, the company reported net income of $90,000, paid a dividend of $20,000, issued more common stock for $40,000, and borrowed $60,000 from the bank. what is total stockholders equity at the end of the year?

Answer

Explanation:

Step1: Calculate change in retained earnings

Retained earnings change = Net income - Dividends $90000 - 20000=70000$

Step2: Calculate ending retained earnings

Ending retained earnings = Beginning retained earnings+ Change in retained earnings $250000 + 70000=320000$

Step3: Calculate ending common - stock

Ending common stock = Beginning common stock+ New stock issuance $300000+40000 = 340000$

Step4: Calculate total stockholders' equity

Total stockholders' equity = Ending retained earnings+ Ending common stock $320000+340000 = 660000$

Answer:

$660000$