Noric Cruises Inc. began the month of October with the following balances:

Common Stock, $150,000;

Additional Paid-In Capital, $3,050,000; and Retained Earnings, $12,400,000.

During June, Noric issued for cash 40,000 shares of common stock (with a stated value of $1) at $14 per share. Noric reported the following results for the month ended October 31:

Net income $2,200,000

Cash dividends declared 460,000

Requried:

1. Prepare a statement of stockholders' equity for the month ended October 31.

Stockholders equity is $17,900,000

Explanation:

The stockholders'equity section of the balance sheet refers to the worth of shareholders' investment in the business.

It comprises of capital paid as well as the returns earned on it thus far, in other words, the retained earnings.

Common stock $1 stated value $150,000 + ($1*40000) $190,000

Additional paid capital $3,050,000 + ($13*40,000) $ 3,570,000

Total paid capital $ 3,760,000

Retained earnings ($12,400,000+$2,200,000-$460,000) $ 14,140,000

Stockholders equity $17,900,000

The retained earnings for the month is the opening retained earnings plus net income minus cash dividends declared, since dividends are been paid from retained earnings