Service revenue $ 78,500 Rent expense 21,000 Postage expense 1,500 Salaries expense 22,000 Legal fees expense 2,600 Supplies expense 20,000 In addition, the balance of common stock at the beginning of the year was $175,000, and the balance of retained earnings was $36,000. During the year, the company issued additional shares of common stock for $30,000 and paid dividends of $20,000. Required: Prepare an income statement. Prepare a statement of stockholders' equity.

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Barry

Business

24 January, 15:36

Service revenue $ 78,500 Rent expense 21,000 Postage expense 1,500 Salaries expense 22,000 Legal fees expense 2,600 Supplies expense 20,000 In addition, the balance of common stock at the beginning of the year was $175,000, and the balance of retained earnings was $36,000. During the year, the company issued additional shares of common stock for $30,000 and paid dividends of $20,000. Required: Prepare an income statement. Prepare a statement of stockholders' equity.

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Carlos Chandler · Answer 1

statement of stockholders' equity

for the year ended 31th December 20XX

Common Stock Retained Earings Total

Balance Jan 1 175,000 36,000 211, 000

Net Earnings 30,900 30,900

Dividends - 20,000 - 20,000

Stock issued 30,000 30,000

Balance, Dec 31 205,000 46,900 251,900

Explanation:

The first step, will be to calculate the net incoem:

Revenue 78,000

Rent expense 21,000

postage expense 1,500

salaries expenses 22,000

legal fees expense 2,600

Total expense (47,100)

Net earnings 30,900

And now we can build the statement of Stockholders equity