Midtown, Inc. had the following transactions in 2018, its first year of operations:

Issued 40,000 shares of common stock. Stock has a par value of $1.00 per share and was issued at $23.00 per share.
Earned net income of $74,000.
Paid no dividends.

At the end of 2018, what is total stockholders' equity?

$994,000

Explanation:

The shareholders equity is usually made up of the common stock and the retained earnings which is the accumulated balance of the company's net income/loss net of dividend paid over the years of operations of the entity.

However, an additional component of the shareholder's equity is the share premium which is the excess amount paid for the company's shared over the par value.

Common stock = $1.00 × 40,000

= $40,000

Share premium = ($23 - $1) × 40,000

= $880,000

total shareholder's equity = $40,000 + $880,000 + $74,000

= $994,000

answer; risk transference;