Answer and Explanation:
The preparation of the statement of stockholder equity is presented below:
Particulars Common Stock Additional Paid in Capital Retained Earnings Total
Balances, October 1 $150,000 $3,225,000 $12,400,000 $15,775,000
Issued Common Stock $50,000 $750,000 $800,000
(50,000 shares × $1) (50,000 shares × $16)
Add: Net Income $2,350,000 $2,350,000
Less: Dividends -$475,000 -$475,000
Balances, October 31 $200,000 $3,975,000 $14,275,000 $1,8450,000
