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5 March, 04:39

At the beginning of Year 1, a company reported a balance in common stock of $166,000 and a balance in retained earnings of $66,000. During the year, the company issued additional shares of stock for $56,000, earned net income of $46,000, and paid dividends of $11,600. In addition, the company reported balances for the following assets and liabilities on December 31.

1. Prepare a statement of stockholders' equity.

2. Prepare a balance sheet.

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  1. 5 March, 05:37
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    1.

    Shareholders equity = Common stock + Retained earnings

    Beg. balance = Common stock+Retained earnings = 166,000 + 66,000 = 232,000

    Statement of shareholder's equity

    Beg balance 232,000

    Issuance of common stock 56,000

    Add: Net Income 46,000

    Less: Dividends 11,600

    End balance 322,400

    Balance sheet

    There is not information for preparation of balance sheet but following is the layout:

    Assets:

    Cash

    Supplies

    Prepaid rent

    Land

    Liabilities:

    Accounts payable

    Salaries

    Utilities

    Notes payable

    Stockholder's equity:

    Common stock 222,000 [166,000+56,000]

    Retained earnings 112,000 [66,000+46,000]

    Total 334,000
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