Question

Wendell Company provided the following pertaining to its accounting year that ended December 31, 2016: Common stock with a $10,000 par value was sold for $52,000 cash Cash dividends totaling $20,200 were declared, of which $15,200 were paid Net income was $72,000 A 5% stock dividend resulted in a common stock distribution, which had a $5,000 par value and a $23,200 market value Treasury stock repurchased in a prior year for $9,200 was resold for $7,200 and in the journal entry to record the sale, Additional paid-in capital was debited for the amount of the difference between the repurchase price and the resale price What is the amount of increase in Wendell’s total stockholders’ equity for the year ended December 31, 2016?

A) $92,800.

B) $111,000.

C) $116,000.

D) $87,800.

Answer 1

CALCULATION OF THE ADDITTION OF SHAREHOLDER'S EQUITY
FOR THE YEAR ENDED DECEMBER 31 , 2016
Issue of Common Stock	$                     10,000
Addittional of Paid in Capital - Common Stock	$                     42,000
Add: Stock Dividend distribution
Par Value of Common Stock	$                       5,000
Addittional of Paid in Capital - Common Stock	$                     18,200
Retained Earning	$                     28,600
Addittion due to sold of Treasury Stock	$                       7,200
Total Addittion during the year	$                 1,11,000
CALCULATION OF THE RETAINED EARNING
Net Income of the year
Less : Cash Dividend Declared	$                     72,000
Less: Stock Dividend	$                     20,200
Balance in Retained Earning	$                     23,200
	$                     28,600
Answer = Option B = $ 111,000