Question

At the beginning of 2021, Artichoke Academy reported a balance in common stock of $164,000 and a balance in retained earnings of $64,000. During the year, the company issued additional shares of stock for $54,000, earned net income of $44,000, and paid dividends of $11,400. In addition, the company reported balances for the following assets and liabilities on December 31. Assets Liabilities Cash $54,000 Accounts payable $13,600 Supplies 12,300 Utilities payable 5,200 Prepaid rent 31,000 Salaries payable 4,900 Land 270,000 Notes payable 29,000.
Required:
1. Prepare a statement of stockholders’ equity.
2. Prepare a balance sheet.

Answer 1

Answer:

                       Artichoke Academy

           Statement of Stockholders’ Equity

        For the Year Ended December 31, 2021

Beginning balance Common Stock                   $164,000

Beginning balance retained earnings                $64,000

Subtotal                                                              $228,000

Common Stock issued                                        $54,000

Earned net income                                              $44,000

Distributed dividends                                          ($11,400)

Ending balance Common Stock                      $218,000

Ending balance retained earnings                    $96.600

Total Stockholders' Equity December 31, 2021: $314,600

          Artichoke Academy

              Balance Sheet

For the Year Ended December 31, 2021

Assets:

Cash $54,000

Prepaid rent $31,000

Supplies $12,300

Land $270,000

Total assets: $367,300

Liabilities and stockholders' equity:

Accounts payable $13,600

Utilities payable $5,200

Salaries payable $4,900

Notes payable $29,000

Common stock $218,000

Retained earnings $96,600

Total liabilities and stockholders' equity: $367,300