Asked by Juanita Soriano on Jun 08, 2024

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If paid-in capital in excess of par/preferred stock is $30,000, preferred stock is $200,000, paid-in capital in excess of par/common stock is $20,000, common stock is $525,000, and retained earnings is $105,000
(deficit), total stockholders' equity is $880,000.

Paid-in Capital

Refers to the funds raised by a company through the issuance of shares. This capital is provided by shareholders in exchange for equity in the company.

Preferred Stock

Preferred stock is a type of stock that grants holders certain priorities over common stock, including dividends and asset liquidation, often without voting rights.

Common Stock

A type of equity security that represents ownership in a corporation, giving shareholders voting rights and a share in the company's profits through dividends.

  • Acquire knowledge on how to handle and report transactions related to shares, especially issuance at a higher value than face value and treasury stock operations.
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JS
Jarred SciclunaJun 09, 2024
Final Answer :
False
Explanation :
Total stockholders' equity is calculated by adding together the preferred stock, common stock, paid-in capital in excess of par for both preferred and common stock, and retained earnings. In this case, it would be $200,000 (preferred stock) + $525,000 (common stock) + $30,000 (paid-in capital in excess of par/preferred stock) + $20,000 (paid-in capital in excess of par/common stock) + $105,000 (retained earnings) = $880,000. However, since the retained earnings are described as a deficit, it should actually be subtracted, not added. Therefore, the correct total stockholders' equity would be $200,000 + $525,000 + $30,000 + $20,000 - $105,000 = $670,000.