Question

At the beginning of 2018, Artichoke Academy reported a balance in common stock of $170,000 and a balance in retained earnings of $70,000. During the year, the company issued additional shares of stock for $60,000, earned net income of $50,000, and paid dividends of $12,000. In addition, the company reported balances for the following assets and liabilities on December 31.

At the beginning of 2018, Artichoke Academy reported a balance in common stock of $170,000 and a balance in retained earnings of $70,000. During the year, the company issued additional shares of stock for $60,000, earned net income of $50,000, and paid dividends of $12,000. In addition, the company reported balances for the following assets and liabilities on December 31. porn stock of farme re il come one to cete, and patnings e Assets Cash Supplies Prepaid rent Land Liabilities $ 54,600 Accounts payable 12,900 Utilities payable 34,000 Salaries payable 300,000 Notes payable $ 16,600 6,400 5,500 35,000 Required: 1. Prepare a statement of stockholders' equity. ARTICHOKE ACADEMY Statement of Stockholders' Equity Common Stock Retained Earnings Total Stockholders' Equity Beginning balance Ending balance

Answer 1

--Requirement 1

Statement of Stockholder's Equity
	Common Stock	Retained earnings	Total Stockholder's equitu
Beginning balance	$170,000	$70,000	$240,000
Issuance of Common Stock	$60,000		$60,000
Add: Net Income		$50,000	$50,000
Less: Dividends		$12,000	$12,000
Ending balance	$230,000	$108,000	$338,000

--Requirement 2

Balance Sheet
Assets		Liabilities
Cash	$54,600	Accounts payable	$16,600
Supplies	$12,900	Utilities Payable	$6,400
Prepaid Rent	$34,000	Salaries Payable	$5,500
Land	$300,000	Notes payable	$35,000
		Total Liabilities	$63,500
		Stockholder's equity
		Common Stock	$230,000
		Retained earnings	$108,000
		Total Stockholder's equity	$338,000
Total Assets	$401,500	Total Liabilities & Stockholder's equity	$401,500