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Miami Rivet has 500,000 common shares outstanding, and the common stock amount on the balance sheet is $5 million
Miami Rivet has 500,000 common shares outstanding, and the common stock amount on the balance sheet is $5 million. The company has not issued or repurchased common stock during the year. Last year's balance in retained earnings was $11.2 million, and the firm paid out dividends of $1.8 million during the year. Based on this information Miami Rivet's Total Stockholders' Equity is: (You should enter the full number i.e. if your calculations result in a TSE of 1 million enter 1000000.)
Expert Solution
Computation of Miami Rivet's Total Stockholders' Equity:
Total Stockholders' Equity = Common Stock + Retained Earnings
Here,
Retained Earnings = Beginning Balance of Retained Earnings + Net Income-Cash Dividends Paid
= $11,200,000+ $3,000,000-$1,800,000
= $12,400,000
Total Stockholders' Equity = $5,000,000+$12,400,000 = $17,400,000
Note: As you have not provided information about Net income. So, i have assumed $3,000,000 for Net Income.
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