Charleston Corporation has the following accounts at December 31: Common Stock, $10 par 7,000 shares issued, $70,000; Paid-in Capital in Excess of Par $10,000; Retained Earnings $45,000; and Treasury Stock—Common, 500 shares, $10,000. Prepare the stockholders’ equity section of the balance sheet.

$115000

Explanation:

Given: Common stock= $70000

          Paid in capital in excess of par $10000.

          Retained earning= $45000.

          Treasury Stock= 500 shares at $10000.

Stockholder´s equity is the total amount of asset after paying all liabilities.

Now, preparing stockholder´s equity section of the balance sheet.

We know, common stock is issued at par value and Paid-in capital is equal to the amount of common stock and capital in excess of par. Treasury stock should be deducted from the stockholder equity section.

Stockholder´s equity

Paid in capital:

Common stock = $70000

Paid in capital in excess of par common stock= ($10000+$70000)= $80000

Retained earning=                                                                                   $45000

Deducting treasury stock                                                                   = ($10000)

∴ Total stockholder´s equity                                                              = $115000

Hence, the stockholders’ equity section of the balance sheet is $115000.  

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