saved 11 Question 18 1 point Kagan Corporation was organized

saved 11 Question 18 (1 point) Kagan Corporation was organized on January 2, 2017. During 2017, Kagan issued 40,000 shares at $24 per share, purchased 6,000 shares of treasury stock at $26 per share, and had net income of $600,000. What is the total amount of stockholders equity at December 31,2017? a) $1,280,000 b) $1,416,000 c) $1.404,000 d) $1.440,000 12. Quiz Started 2 0

Solution

Issue of Shares = 40,000*24 = 960,000

Less: Buy Back of Shares 6000*24 = 144,000

Add: Net Income 600,000

Amount of Shareholders’ Equity = $1416,000 i.e. b

Amount of shares bought back will be deducted at book value from Shareholder’s Equity