Question
The stockholder's equity section of Great Dane Inc. as of December 21, 2027 was as follow: Common stock, par value $2; authorized 20,000 shares; issued
The stockholder's equity section of Great Dane Inc. as of December 21, 2027 was as follow:
Common stock, par value $2; authorized 20,000 shares;
issued and outstanding 10,000 shares $20,000
Paid in Capital in excess of par 30,000
Retained earnings 85,000
Total $135,000
On January 12, 2028, Great Dane issued 10,000 shares of $1 par common stock for $4 per share. On February 4, 2028, Great Dane bought back, using the cost method. 2,000 shares of its own $1 par common stock for $3.50 per share. On March 1, 2028, the board of directors declared a 15% stock dividend, and accordingly 1,500 additional shares were issued. On March 1, 2028, the fair value of the stock was $6 per share. For the two months ended February 28, 2028, great Dane sustained a net loss of $15,000.
What amount should Great Dane report as retained earnings as of March 1,2028?
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