Statement of stockholders’ equity

Question

Financial information related to Organic Products Company for the month ended June 30, 20Y9, is as follows:

Line Item Description Amount
Net income for June $ 115,000
Dividends paid in June 25,000
Common stock, June 1, 20Y9 180,000
Common stock issued in June 50,000
Retained earnings, June 1, 20Y9 1,630,000

Question Content Area
a. Prepare a statement of stockholders’ equity for the month ended June 30, 20Y9. If an amount box does not require an entry, leave it blank.

Answer 1

To prepare a statement of stockholders’ equity for Organic Products Company for the month ended June 30, 20Y9, we will present the changes in common stock and retained earnings during this period.

The components to include in the statement are:

1. Common Stock
2. Retained Earnings
3. Total Stockholders' Equity

Here is the statement:

Organic Products Company
Statement of Stockholders' Equity
For the Month Ended June 30, 20Y9

                                            Common Stock      Retained Earnings          Total
-------------------------------------------------------------------------------------------------
Balance, June 1, 20Y9                      $   180,000      $   1,630,000      $  1,810,000 
Add: Common Stock Issued                     50,000                  -                     50,000 
-------------------------------------------------------------------------------------------------
Balance, June 30, 20Y9                      $   230,000      $   1,630,000      $  1,860,000 
-------------------------------------------------------------------------------------------------
Balance, June 1, 20Y9                      $   180,000 
Add: Common Stock Issued                     50,000 
                                                --------- 
Total Common Stock, June 30                  230,000      
-------------------------------------------------------------------------------------------------
Add: Net Income for June                                       $     115,000                     115,000 
Less: Dividends Paid                                           (    25,000)                   (  25,000) 
-------------------------------------------------------------------------------------------------
Balance, June 30, 20Y9                                          $   1,720,000                       
-------------------------------------------------------------------------------------------------
Total Stockholders' Equity at June 30, 20Y9:                   $  1,860,000    
-------------------------------------------------------------------------------------------------

Explanation:

1. We start with the balances of common stock and retained earnings at the beginning of the month.
2. We add the common stock issued during the month to the common stock balance.
3. We calculate retained earnings by adding the net income for the month and subtracting the dividends paid from the beginning retained earnings.
4. Finally, we total the common stock and retained earnings to get the total stockholders' equity at the end of the month.

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