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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Kent Corporation was organized on January 1, 2014. On that date, it issued 200,000 shares of $10 par value common stock at $15 per share (400,000 shares were authorized). During the period January 1, 2014, through December 31, 2019, Kent reported net income of $750,000 and paid cash dividends of $380,000. On January 5, 2019, Kent purchased 12,000 shares of its common stock at $12 per share. On December 28, 2019, 8,000 treasury shares were sold at $8 per share. Kent used the cost method of accounting for treasury shares. What is Kent’s total shareholders’ equity as of December 31, 2019?

  1. a. $3,290,000
  2. b. $3,306,000
  3. c. $3,338,000
  4. d. $3,370,000

To determine

Identify the Company K’s total shareholder’s equity as of December 31, 2019.

Explanation

Shareholder’s equity:

The claims of owners on a company’s resources, after the liabilities are paid off, are referred to as stockholders’ equity. Therefore, stockholders’ equity is sometimes referred to as net worth of owners or shareholders or stockholders.

Company K
Shareholder's equity
For the  year ended December 31,2019
ParticularsAmount in $
Capital stock on January 1, 2014  (200,000×$15) 3,000,000
Add: Ne

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