Question

In: Accounting

You are given the following information for Company ABC as of December 31, 2016: Capital Stock,...

You are given the following information for Company ABC as of December 31, 2016:

Capital Stock, $1,000,000 ($1 par)

Paid-In Capital in Excess of Par Value—Common, $4,000,000

Retained Earnings Balance on January 1, 2016, $400,000

Retained Earnings Balance on December 31, 2016, $300,000

Dividends declared and paid in 2016: $1,100,000

What was the company's net income for 2016?

Select one:

a. $1,200,000

b. $100,000

c. $0

d. None of the above

How many shares of stock are issued and outstanding?

Select one:

a. 4,000,000

b. 5,000,000

c. 1,000,000

d. None of the above

Expert Solution

Ans.	Company Net Income for 2016:
	Particulars		Amt.($)
	Retained Earning balance on December 31, 2016		300,000
	Add: Dividend Paid in 2016		1,100,000
			1,400,000
	Less: Retained Earning balance on January 1, 2016		400,000
	Net Income		$ 1,000,000

	d) None of the above.


Ans.	Shares of Stock Issued and Outstanding:
	No. of Shares =	Value of Stock / Par value
	=	$1,000,000 / $1
	=	1,000,000

ekkarill92 answered 1 year ago

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