Question

Martin Mfg Co is Incorporated on January 1, 2020. During it's first fiscal year, which ends Dec 31, 2020, Martin Mfg used the following transsctions

Issued 300 shares for $9 per share.

Purchased 30 units of inventory on account at a cost of $30 per unit.

Sold purchased inventory for $60 per unit.

Paid vendors for 15 units of inventory.

Paid $200 in dividends

Ignore income taxes, what is the balance of the shareholders equity as of 12/31/2020

please show your work

Answer 1

Answer: Balance of Shareholders equity = $ 3,400

Working:

Statement of Stockholders` Equity
For the year ended December 31,2020
	Common Stock	Retained Earnings	Total Stockholders` Equity
Beginning Balance	$                       -	$                              -	$                                               -
Addition:	$                2,700	0	$                                        2,700
Net income	$                       -	$                          900	$                                           900
Dividends	$                       -	$                        (200)	$                                         (200)
Ending Balance	$                2,700	$                          700	$                                        3,400

Martin Mfg Co
Income statement
For the Year Ended December 31 ,2020
Revenue
Sales [30*60]	$                1,800
Total Revenue (A)	$                1,800
Expenses:
Cost of Goods Sold [30*30]	$                  (900)
Total Expense (B)	$                  (900)
Net Income (A-B)	$                    900