Question

Presented below is the stockholders' equity section of Sheffield Corp. at December 31, 2020:

Common stock, par value $20; authorized 75,000 shares;
	issued and outstanding 45200 shares	$ 904000
Paid-in capital in excess of par value		352000
Retained earnings		508000
		$1764000

During 2021, the following transactions occurred relating to stockholders' equity:

2700 shares were reacquired at $28 per share.
3400 shares were reacquired at $34 per share.
1800 shares of treasury stock were sold at $31 per share.

For the year ended December 31, 2021, Sheffield reported net income of $441000. Assuming Sheffield accounts for treasury stock under the cost method, what should it report as total stockholders' equity on its December 31, 2021, balance sheet?

1

$2062400.

2

$1628600.

3

$2069600.

4

$2066000.

Answer 1

Compute total Stockholder's equity

Common Stock	904000
Paid in capital in excess of par value	352000
Paid in Capital from sale of treasury stock	5400
Total paid in Capital	1261400
Retained earnings	949000
Total	2210400
Less: Treasury Stock	-140800
Total Stockholder's equity	2069600

So answer is 3) $2069600