The Squash Company's shareholders' equity on January 1, 2018 was $3,125,500. During 2018, Squash Company reported...

The Squash Company's shareholders' equity on January 1, 2018 was $3,125,500. During 2018, Squash Company reported the following:

• Net income of $575,325.
• Declared cash dividends totaling $125,000; the dividends had not been paid as of December 31, 2018.
• Issued 10,000 shares of $5 par value common stock at $9 per share.
• Purchased 5,000 shares of its common stock for $9.75 per share; the shares are being held as treasury shares.
• Sold 1,500 shares of treasury stock for $9.25 per share.
• Issued 2,000 shares of $5 par value common stock resulting from the declaration of a stock dividend during 2018; the market value of the common stock on the date of declaration was $10.25 per share.

What was shareholders' equity as of December 31, 2018? (Show your computations in order to get partial credit in case your answer is incorrect)

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Expert Solution

Shareholder's Equity balance as of December 31, 2018 will be $3630950

Detail working for your refrence

Transation	Common Stock	+	Paid In capital in Excess of Par - Common	+	Retained Earning	-	Treasury Stock	Total Shareholder Equity
Beg								$3,125,500.00
1					$575,325			$575,325.00
2					-$125,000			-$125,000.00
3	$50,000		$40,000					$90,000.00
4							-$48,750	-$48,750.00
5					-$750		$14,625	$13,875.00

6	$10,000		$10,500		-$20,500
Total	$60,000		$50,500		$429,075		-$34,125	$3,630,950.00

ekkarill92 answered 2 years ago

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