Question

At the beginning of the year (January 1), Buffalo Drilling has $10,000 of common stock outstanding and retained earnings of $7,000. During the year, Buffalo reports net income of $7,300 and pays dividends of $2,000. In addition, Buffalo issues additional common stock for $6,800.Prepare the statement of Shareholer'sequity in the end of the year.

Answer 1

Answer:

Shareholders Equity  

INITIAL Shareholders Equity  $ 17.000

Common Stock  $ 6.800

Retained Earnings  $ 5.300

FINAL Shareholders Equity $ 29.100

Explanation:

Retained Earnings Report  

Opening retained earnings $ 7,000

Add: Net Income $ 7,300

Subtotal $ 14,300

Less: Dividens -$ 2,000

Total $ 12,300

Stockholders' Equity   INITIAL   FINAL  

Common Stock  $ 10,000 $ 16,800    

Retained Earnings  $ 7,000 $ 12,300

TOTAL EQUITY  $ 17,000 $ 29,100