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

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