Statement of stockholders’ equity

Question

Climate Control Systems Co. offers its services to residents in the Spokane area. Selected accounts from the ledger of Climate Control Systems for the fiscal year ended December 31, 20Y2, are as follows:
Common Stock
Transaction	Debit amount	Transaction	Credit amount
 	Jan. 1	75,000
 	Feb. 15	25,000

Retained Earnings
Transaction	Debit amount	Transaction	Credit amount
Dec. 31	160,000	Jan. 1 (20Y2)	4,150,800
 	Dec. 31	700,000

Dividends
Transaction	Debit amount	Transaction	Credit amount
Mar. 31	40,000	Dec. 31	160,000
June 30	40,000		
Sept. 30	40,000		
Dec. 31	40,000

Prepare a statement of stockholders’ equity for the year ended December 31, 20Y2. If a net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign.

GPT-4o mini · Answer

Here's the statement of stockholders’ equity for Climate Control Systems Co. for the year ended December 31, 20Y2:

Climate Control Systems Co.

Statement of Stockholders' Equity

For the Year Ended December 31, 20Y2

| Description | Common Stock | Retained Earnings | Total | |------------------------------------|------------------|-----------------------|--------------------| | Balance, January 1, 20Y2 | $75,000 + $25,000 = $100,000 | $4,150,800 | $4,250,800 | | Net Loss | | -$160,000 | -$160,000 | | Dividends | | -$160,000 | -$160,000 | | Balance, December 31, 20Y2 | $100,000 | $4,150,800 - $160,000 - $160,000 | $4,100,800 |

Notes:

Common Stock increased by $100,000 for the year due to the issuance of shares.
Retained Earnings realized a net loss of $160,000 (which includes all dividends declared).
The adjustments were made for each of the four quarterly dividends, totaling $160,000.
The final balance in Retained Earnings at year-end is calculated as:
- Starting balance: $4,150,800
- Minus total dividends: -$160,000
- Ending balance: $4,150,800 - $160,000 = $3,990,800

Final Totals:

Common Stock: $100,000
Retained Earnings: $3,990,800

Overall Total Equity at Year-End:

Total Stockholders' Equity: $100,000 (Common Stock) + $3,990,800 (Retained Earnings) = $4,090,800

Note: The net loss should be characterized separately from dividends for clarity in the presentation of the statement of stockholders’ equity. If you need to show it differently or have any specific accounting standards to follow, please let me know!