Statement of stockholders’ equity

Question

Brenda Tooley owns and operates Speedy Delivery Services. On January 1, 20Y7, Common Stock had a balance of $60,000, and Retained Earnings had a balance of $826,000. During the year, $18,000 of additional common stock was issued, and $11,000 of dividends were paid. For the year ended December 31, 20Y7, Speedy Delivery reported a net income of $68,500.

Prepare a statement of stockholders' equity for the year ended December 31, 20Y7. If a net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign. If an amount box does not require an entry, leave it blank.

Answer 1

Below is the statement of stockholders' equity for Speedy Delivery Services for the year ended December 31, 20Y7:

                      Speedy Delivery Services
                    Statement of Stockholders' Equity
                          For the Year Ended
                           December 31, 20Y7

                                                 Common Stock    Retained Earnings   Total
                                                 ------------    ----------------   ------
Balance, January 1, 20Y7                          $ 60,000          $ 826,000      $ 886,000

Additional Common Stock Issued                       18,000                 -          18,000

Net Income                                              -               68,500        68,500

Dividends Paid                                          -              (11,000)      (11,000)

                                                 ------------    ----------------   ------
Balance, December 31, 20Y7                       $ 78,000          $ 883,500      $ 961,500

Explanation:

1. Balance, January 1, 20Y7: This row shows the starting balances for Common Stock and Retained Earnings.
2. Additional Common Stock Issued: This row reflects the additional issuance of common stock during the year, which increases the Common Stock balance.
3. Net Income: This row shows the net income earned during the year, which increases the Retained Earnings balance.
4. Dividends Paid: This row reflects the dividends paid out during the year, which decreases the Retained Earnings balance.
5. Balance, December 31, 20Y7: This final row provides the ending balances for Common Stock and Retained Earnings, summing them to provide the total stockholders' equity.

Thus, the final total stockholders' equity as of December 31, 20Y7, is $961,500.