At the beginning of the year (January 1), a company has $10,000 of common stock outstanding and retained earnings of $7,200. During the year, the company reports net income of $7,500 and pays dividends of $2,200. In addition, the company issues additional common stock for $7,000.

Required: Prepare the statement of stockholder's equity at the end of the year (December 31)

The preparation of the statement of stockholder's equity at the end of the year (December 31) is presented below:

Statement of stockholder's equity

Particulars Common stock Retained earnings Total stockholder

Equity

Beginning

balance $10,000 $7,200 $17,200

Add: Additional

common stock $7,000 $7,000

Add: Net income $7,500 $7,500

Less - dividend - $2,200 - $2,200

Ending balance $17,000 $12,500 $29,500