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23 August, 15:45

Marigold Corp. began the year 2022 with $98300 in its Common Stock account and a debit balance in Retained Earnings of $42100. During the year, the company earned net income of $21100, and declared and paid $7000 of dividends. In addition, the company sold additional common stock amounting to $25700. Based on this information, what should the transaction analysis show for total stockholders' equity at the end of 2022? a. $128600 b. $180200 c. $194200 d. $96000

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  1. 23 August, 18:41
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    Option (d) is correct.

    Explanation:

    Given that,

    Beginning common stock = $98,300

    Common stock sold = $25,700

    Beginning balance of retained earnings = ($42,100)

    Net Income = $21,100

    Dividends = $7,000

    Ending balance of common stock:

    = Beginning common stock + Common stock sold

    = $98,300 + $25,700

    = $124,000

    Ending balance of retained earnings:

    = Beginning balance + Net Income - Dividends

    = ($42,100) + $21,100 - $7,000

    = $28,000 debit

    Ending balance of total stockholder's equity account:

    = Ending balance of common stock + Ending balance of retained earnings

    = $124,000 - $28,000

    = $96,000
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