{"id":206803,"date":"2025-04-09T07:00:06","date_gmt":"2025-04-09T07:00:06","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=206803"},"modified":"2025-04-09T07:00:31","modified_gmt":"2025-04-09T07:00:31","slug":"roberto-corporation-was-organized-on-january-1-2024","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/04\/09\/roberto-corporation-was-organized-on-january-1-2024\/","title":{"rendered":"Roberto Corporation was organized on January 1, 2024"},"content":{"rendered":"\n

Roberto Corporation was organized on January 1, 2024. The firm was authorized to issue 95,000 shares of $5 par common stock. During 2024, Roberto had the following transactions relating to shareholders’ equity:<\/p>\n\n\n\n

Issued 9,100 shares of common stock at $5.30 per share.
Issued 19,300 shares of common stock at $8.40 per share.
Reported a net income of $96,000.
Paid dividends of $50,000.
Purchased 2,600 shares of treasury stock at $10.40 (part of the 19,300 shares issued at $8.40).
What is total shareholders’ equity at the end of 2024?<\/p>\n\n\n\n

$279,310
$232,310
$252,270
$229,310<\/p>\n\n\n\n

The correct answer and explanation is :<\/strong><\/mark><\/p>\n\n\n\n

To calculate total shareholders\u2019 equity<\/strong> at the end of 2024 for Roberto Corporation, we need to follow these steps:<\/p>\n\n\n\n

\n\n\n\n

Step 1: Common Stock Issued<\/strong><\/h3>\n\n\n\n

Par value = $5
Authorized shares = 95,000<\/p>\n\n\n\n

First issuance:<\/strong><\/p>\n\n\n\n

    \n
  • 9,100 shares @ $5.30<\/li>\n\n\n\n
  • Proceeds = 9,100 \u00d7 $5.30 = $48,230<\/strong><\/li>\n\n\n\n
  • Par value = 9,100 \u00d7 $5 = $45,500<\/strong><\/li>\n\n\n\n
  • Additional Paid-In Capital (APIC) = $48,230 – $45,500 = $2,730<\/strong><\/li>\n<\/ul>\n\n\n\n

    Second issuance:<\/strong><\/p>\n\n\n\n

      \n
    • 19,300 shares @ $8.40<\/li>\n\n\n\n
    • Proceeds = 19,300 \u00d7 $8.40 = $162,120<\/strong><\/li>\n\n\n\n
    • Par value = 19,300 \u00d7 $5 = $96,500<\/strong><\/li>\n\n\n\n
    • APIC = $162,120 – $96,500 = $65,620<\/strong><\/li>\n<\/ul>\n\n\n\n
      \n\n\n\n

      Step 2: Treasury Stock<\/strong><\/h3>\n\n\n\n
        \n
      • Purchased 2,600<\/strong> shares at $10.40<\/strong> = $27,040<\/strong><\/li>\n\n\n\n
      • Treasury stock reduces equity<\/li>\n<\/ul>\n\n\n\n
        \n\n\n\n

        Step 3: Net Income and Dividends<\/strong><\/h3>\n\n\n\n
          \n
        • Net Income = $96,000<\/strong><\/li>\n\n\n\n
        • Dividends = $50,000<\/strong><\/li>\n<\/ul>\n\n\n\n
          \n\n\n\n

          Step 4: Calculate Ending Shareholders\u2019 Equity<\/strong><\/h3>\n\n\n\n
          Component<\/th>Amount<\/th><\/tr><\/thead>
          Common Stock (total par value)<\/td>$45,500 + $96,500 = $142,000<\/strong><\/td><\/tr>
          APIC<\/td>$2,730 + $65,620 = $68,350<\/strong><\/td><\/tr>
          Retained Earnings<\/td>$96,000 – $50,000 = $46,000<\/strong><\/td><\/tr>
          Less: Treasury Stock<\/td>($27,040)<\/strong><\/td><\/tr>
          Total Shareholders’ Equity<\/strong><\/td>$229,310<\/strong><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
          \n\n\n\n

          \u2705 Final Answer: $229,310<\/strong><\/h3>\n\n\n\n
          \n\n\n\n

          Explanation (Approx. 300 words)<\/strong><\/h3>\n\n\n\n

          Shareholders’ equity represents the owners\u2019 claim on the assets of a corporation after all liabilities have been deducted. It typically consists of common stock<\/strong>, additional paid-in capital (APIC)<\/strong>, retained earnings<\/strong>, and treasury stock<\/strong> (which reduces equity).<\/p>\n\n\n\n

          In Roberto Corporation\u2019s case, common stock was issued twice during the year. In the first issuance, 9,100 shares were sold slightly above par at $5.30, generating both par value and a small premium (APIC). In the second round, 19,300 shares were issued at a higher price of $8.40, again above par, contributing significantly to both common stock and APIC.<\/p>\n\n\n\n

          Treasury stock is a repurchase of previously issued shares. When Roberto bought back 2,600 shares at $10.40, this was recorded at cost<\/strong>, and the total ($27,040) is subtracted from equity.<\/p>\n\n\n\n

          Net income for the year adds to retained earnings, while dividends paid reduce it. In this case, after netting $96,000 income and subtracting $50,000 in dividends, retained earnings add $46,000 to equity.<\/p>\n\n\n\n

          Adding up the components\u2014par value of common stock ($142,000), APIC ($68,350), and retained earnings ($46,000)\u2014and then subtracting treasury stock ($27,040) results in total shareholders\u2019 equity of $229,310<\/strong> at year-end 2024.<\/p>\n\n\n\n

          This figure reflects the company\u2019s financing from shareholders, earnings retained in the business, and adjustments from share repurchases.<\/p>\n\n\n\n

          \"\"<\/figure>\n","protected":false},"excerpt":{"rendered":"

          Roberto Corporation was organized on January 1, 2024. The firm was authorized to issue 95,000 shares of $5 par common stock. During 2024, Roberto had the following transactions relating to shareholders’ equity: Issued 9,100 shares of common stock at $5.30 per share.Issued 19,300 shares of common stock at $8.40 per share.Reported a net income of […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-206803","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/206803","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=206803"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/206803\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=206803"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=206803"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=206803"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}