Ask Question
3 September, 09:02

At the beginning of the year (January 1), Buffalo Drilling has $10,000 of common stock outstanding and retained earnings of $6,400. During the year, Buffalo reports net income of $6,700 and pays dividends of $1,400. In addition, Buffalo issues additional common stock for $6,200. Required: Prepare the statement of stockholders' equity at the end of the year (December 31)

+3
Answers (1)
  1. 3 September, 12:20
    0
    Total Stock Holder equity=$27900

    Explanation:

    Amount in the beginning:

    Common Stock=$10000 Retained earnings=$6400

    Stock Holder equity=Common Stock + Retained earnings

    Stock Holder equity=10000+6400

    Stock Holder equity=$16400

    During the year:

    Net Income=$6700, Dividends=-$1400 (-ve shows less from total)

    Additional Common Stock=$6200

    Total Common Stock=$10000+$6200

    Total Common Stock=$16200

    Total Retained Earning=$6400+$6700-$1400

    Total Retained Earnings=$11700

    Total Stock Holder equity=Total Common Stock+Total Retained Earnings

    Total Stock Holder equity=$16200+$11700

    Total Stock Holder equity=$27900
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “At the beginning of the year (January 1), Buffalo Drilling has $10,000 of common stock outstanding and retained earnings of $6,400. During ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers