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At the beginning of the year (January 1), Buffalo Drilling has $11,000 of common stock outstanding and retained earnings of $8,200. During the year, Buffalo reports net income of $8,500 and pays dividends of $3,200. In addition, Buffalo issues additional common stock for $8,000.
Required:
Prepare the statement of stockholders’ equity at the end of the year (December 31).

Respuesta :

The preparation of the statement of the stockholder equity is as follows:

Statement of stockholder equity

Outstanding common stock $11,000

Add: Retained Earnings $8,200

Add: Net income $8500

Less - Dividend paid $3,200

Add: Issuance of the additional common stock $8,000

Stockholder equity $32,500

Therefore we can conclude that the balance of the stockholder equity at the end of the year December 31 is $32,500.

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