Statement of stockholders’ equity

Question

Brenda Tooley owns and operates Speedy Delivery Services. On January 1, 20Y7, Common Stock had a balance of $75,000, and Retained Earnings had a balance of $615,700. During the year, $15,000 of additional common stock was issued, and $6,000 of dividends were paid. For the year ended December 31, 20Y7, Speedy Delivery reported a net income of $85,300.

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

To prepare a statement of stockholders' equity for Speedy Delivery Services for the year ended December 31, 20Y7, we will summarize the changes in common stock and retained earnings, including new stock issuance, dividends paid, and net income.

Here is the Statement of Stockholders' Equity:

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

| Description | Common Stock | Retained Earnings | Total Stockholders' Equity | |-------------------------------|--------------|-------------------|----------------------------| | Balance, January 1, 20Y7 | $75,000 | $615,700 | $690,700 | | Issuance of Common Stock | $15,000 | | $15,000 | | Net Income | | $85,300 | $85,300 | | Dividends Paid | | ($6,000) | ($6,000) | | Balance, December 31, 20Y7 | $90,000 | $695,000 | $785,000 |

Calculations:

1. Common Stock:

   • Beginning balance: $75,000
   • Add: Issuance of Common Stock: $15,000
   • Ending balance: $75,000 + $15,000 = $90,000

2. Retained Earnings:

   • Beginning balance: $615,700
   • Add: Net Income: $85,300
   • Less: Dividends Paid: ($6,000)
   • Ending balance: $615,700 + $85,300 - $6,000 = $695,000

3. Total Stockholders' Equity:

   • Common Stock: $90,000
   • Retained Earnings: $695,000
   • Total: $90,000 + $695,000 = $785,000

This statement summarizes the equity transactions and changes in Speedy Delivery Services' stockholders' equity for the specified period.