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7 January, 04:39

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)

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  1. 7 January, 05:00
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    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
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