Question

Catena's Marketing COmpany has the following adjusted trial balance at the end of the current year. Cash dividends of $580 were declared at the end of the year, and 640 additional shares of common stock ($0.10 par value per share were issuues at the end of the year for $2560 in cash (for a total at the end of the year of 850 shares). These effects are included below:

	Catena's Marketing Company Adjusted Trial Balance End of the Current Year debit	credit
cash	1670
accounts receivable	2360
interest receivable	190
prepaid insurance	1710
long-term notes receivable	2820
equipment	16300
accumulated depreciation		2930
accounts payable		2240
dividends payable		580
accrued expenses payable		3900
income taxes payable		2630
unearned rent revenue		430
common stock (850 shares)		85
additional paid-in capital		3595
retained earnings		3850
sales revenue		37450
interest revenue		190
rent revenue		710
wages revenue	18300
depreciation expense	1720
utilities expense	340
insurance expense	790
rent expense	9600
income tax expense	2790
total	58590	58590

Catena's Marketing Company

Statement of Stockholders' Equity

For the current year

	common stock	additional paid-in capital	retained earnings	total stockholders' equity
Balance, January 1
Balance, December 31

Answer 1

Answer:

	Common stock	Additional paid-in capital	Retained Earnings	Total Stockholders' Equity
Balance, January 1	21	1099	3850	4970
Issuance of additional shares	64	2496		2560
Net income			4810	4810
Dividends			-580	-580
Balance, December 31	85	3595	8080	11760

Calculations:

Income statement:

Income Statement
Revenues:
sales revenue		37450
interest revenue		190
rent revenue		710
Total revenues		38350
Expenses:
wages revenue	18300
depreciation expense	1720
utilities expense	340
insurance expense	790
rent expense	9600
income tax expense	2790
Total expenses		33540
Net income		4810

	Common stock	Additional paid-in capital	Retained Earnings	Total Stockholders' Equity
Balance, January 1	21**	1099**	3850*	4970
Issuance of additional shares
[640 x $0.10 par]	64
[2,560 - (640 x $10 par)]		2496		2560
Net income			4810	4810
Dividends			-580	-580
Balance, December 31	85*	3595*	8080	11760

*From adjusted trial balance

**Balance amounts.