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At the beginning of Year 2, Jones Company had a balance in common stock of $200,000 and a balance of retained earnings of $5,000. During Year 2, the following transactions occurred:Issued common stock for $50,000 Earned net income of $30,000 Paid dividends of $10,000 Issued a note payable for $20,000. Based on the information provided, what is the total stockholders’ equity on December 31, Year 2?

Respuesta :

Answer:

$275,000

Explanation:

The computation of the total stockholders’ equity is presented below:

                          Jones Company

                               Statement of stockholder's equity

                                          December 31, Year 2  

   

Particulars Common stock Retained earnings Total stockholder equity

Beginning

balance          $200,000              $5,000                              $205,000

Issued common

Stock                $50,000                                                        $50,000

Net income                                 $30,000                          $30,000

Dividend                         -$10,000                            -$10,0000

Ending

balance        $250,0000             $25,000                           $275,000

The issued stock is added, the net income is also added but the dividend amount is subtracted

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