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neversatysfyd
Aug 10, 2009, 02:10 PM
Company A has the following items:
Common stock 720,000
treasury stock 85,000
deferred taxes 100,00
retained earnings 363,000

What total amount should company A report as stock holders equity?

720,000-85,000=635,000
635,000+363,000=998,000

Do I need to add or subtract deferred taxes?

morgaine300
Aug 10, 2009, 04:20 PM
There are deferred tax assets and deferred tax liabilities. Neither affects equity at all.

Deferred tax comes out of differences between book income and taxable income. The expense recorded on the books is based on book income. The difference between that and what is actually due to the tax authorities for the current year is the deferred tax. It's either an asset or a liability, depending on whether book tax is more or less than current tax due.

None of that has to do with equity.

Fvassor
Feb 7, 2013, 10:38 PM
Tax 30 percent. Depreciation for 2005 was found to be understated by $30000. Strike by the employees of a supplier resulted in loss of $25000. The inventory at Dec 31, 2005 was overstated by $40000. A flood distorted a building that had a book value of $500000. Flood are very uncommon in the area. The effect of those events and transactions on 2007 income from continuing operations net of tax value would be what amount?