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Presented below is the stockholders' equity section of Oaks Corporation at December 31, 2014: Common stock,...

Presented below is the stockholders' equity section of Oaks Corporation at December 31, 2014:

Common stock, par value $20; authorized 75,000 shares;

issued and outstanding 45,000 shares $ 900,000

Paid-in capital in excess of par value 350,000

Retained earnings 300,000

$1,550,000

During 2015, the following transactions occurred relating to stockholders' equity:

3,000 shares were reacquired at $28 per share.

3,000 shares were reacquired at $35 per share.

1,800 shares of treasury stock were sold at $30 per share.

For the year ended December 31, 2015, Oaks reported net loss of $150,000. Assuming Oaks accounts for treasury stock under the cost method, what should it report as total stockholders' equity on its December 31, 2015, balance sheet?

a. $1,265,000.

b. $1,261,400.

c. $1,565,000.

d. $1,415,000.

Expert Solution

All working forms part of the answer
Working

	Common Stock at Par	Paid in Capital in Excess of Par	Retained Earnings	Treasury Stock	Total Stockholder's Equity - Ending balance
Beginning Balance	$ 900,000.00	$ 350,000.00	$ 300,000.00		$ 1,550,000.00
Shares re acquired				$ 84,000.00	$ (84,000.00)
Shares re acquired				$ 105,000.00	$ (105,000.00)
Treasury Stock reissued		$ 3,600.00		$ (50,400.00)	$ 54,000.00
Net Loss			$ 150,000.00		$ 150,000.00
TOTAL	$ 900,000.00	$ 353,600.00	$ 450,000.00	$ 138,600.00	$ 1,565,000.00 = Answer

Correct Answer = Option ‘C’ $ 1,565,000

ekkarill92 answered 3 years ago

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