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At the beginning of the year (January 1), a company has $11,000 of common stock outstanding and retained earnings of $7,900. During the year, the company reports net income of $8,200 and pays dividends of $2,900. In addition, the company issues additional common stock for $7,700.

Sagot :

The preparation of the statement of stockholder's equity at the end of the year (December 31) is presented below in the form of table.

How to find the stockholder's equity?

The preparation of the statement of stockholder's equity at the end of the year (December 31) is presented as:

                                   Statement of stockholder's equity        

Particulars Common stock Retained earnings    Total stockholder  

                                                                                          Equity

Beginning

balance        $11,000                  $7,900                     $18,900

Add: Additional

common stock $7,700                                                   $7,700

Add: Net income                           $8,200                    $8,200  

Less - dividend                            -$2,900                    -$2,900

Ending balance  $17,000              $5,300                 $5,300

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