Question

At the beginning of the year (January 1), Buffalo Drilling has $12,000 of common stock outstanding and retained earnings of $7,100. During the year, Buffalo reports net income of $7,400 and pays dividends of $2,100. In addition, Buffalo issues additional common stock for $6,900. Required: Prepare the statement of stockholders' equity at the end of the year (December 31).

Answer 1

Answer:

                                Statement of stockholders' equity

                              at the end of the year (December 31)

                                     Common Stock        Retained Earning       Total

Opening Balance              $12,000                       $7,100               $19,100

Income for the year                                                $7400              $7400

Dividend Paid                                                        ($2,100)             ($2,100)

Common stock issuance   $6,900                                               $6900  

End of the year Balance    $18,900                    $12,400             $31300