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15 May, 08:25

At the beginning of the year (January 1), Buffalo Drilling has $12,000 of common stock outstanding and retained earnings of $6,200. During the year, Buffalo reports net income of $6,500 and pays dividends of $1,200. In addition, Buffalo issues additional common stock for $6,000.

Required:

Prepare the statement of stockholders' equity at the end of the year (December 31).

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  1. 15 May, 10:10
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    The preparation of the statement of stockholders' equity at the end of the year is presented below:

    Buffalo Drilling

    Statement of stockholders' equity

    At the end of the year (December 31)

    Particulars Common Stock Retained earnings Total

    Beginning

    Balance $12,000 $6,200 $18,200

    Net income $6,500 $6,500

    Dividend paid - $1,200 - $1,200

    Additional

    common stock $6,000 $6,000

    Total $18,000 $11,500 $29,500
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