Question

On December 31, 2014, the Stockholders’ Equity section of Mercedes Corporation was as follows:
Common stock, par value $5; authorized 30,000 shares;
issued and outstanding, 9,000 shares $ 45,000
Additional paid-in capital 58,000
Retained earnings 73,000
Total stockholders’ equity $176,000

On March 1, 2015, the board of directors declared a 10% stock dividend and accordingly issued 900 additional shares. The stock’s fair value at that time was $8 per share. For the three months ended March 31, 2015, Mercedes sustained a net loss of $16,000.

Required:
What amount should the company report as retained earnings on its quarterly financial statement dated March 31, 2015?



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  • CreatedSeptember 10, 2014
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