Using the Following Accounts and Balances, Prepare the Stockholders' Equity

question 61

Multiple Choice

Using the following accounts and balances, prepare the stockholders' equity section of the balance sheet. Fifty thousand shares of common stock are authorized, and 5,000 shares have been reacquired.
$$\begin{array} { l r } \text { Common Stock, } \$ 50 \text { par } & \$ 1,250,000 \\\text { Paid-In Capital in Excess of Par } & 800,000 \\\text { Paid-In Capital from Sale of Treasury Stock } & 42,000 \\\text { Retained Earnings } & 4,350,000 \\\text { Treasury Stock } & 155,000\end{array}$$
What is the total amount of paid-in capital that would be reported on the statement of stockholders' equity?

• A) $2,050,000
• B) $2,092,000
• C) $4,350,000
• D) $6,287,000

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Definitions:

Pre-Tax-And-Transfer Income

The amount of income individuals or households earn before taxes are deducted and government transfers are added.

Poverty Rate

The proportion of a population living below the national poverty line, which measures the minimum level of income deemed necessary to achieve an adequate standard of living in a given country.

Poverty Line

A specified threshold of income deemed necessary to meet basic living costs, below which individuals or families are considered to be living in poverty.

Income Inequality

The unequal distribution of annual or lifetime income among individuals or households within a society.