Question
In: Accounting
Mark’s Consulting experienced the following transactions for 2018, its first year of operations, and 2019. Assume...
Mark’s Consulting experienced the following transactions for
2018, its first year of operations, and 2019. Assume that all
transactions involve the receipt or payment of cash.
Transactions for 2018
-
Acquired $75,000 by issuing common stock.
-
Received $110,000 cash for providing services to customers.
-
Borrowed $18,000 cash from creditors.
-
Paid expenses amounting to $55,000.
-
Purchased land for $35,000 cash.
Transactions for 2019
Beginning account balances for 2019 are:
| Cash | $ | 113,000 | |
| Land | 35,000 | ||
| Notes payable | 18,000 | ||
| Common stock | 75,000 | ||
| Retained earnings | 55,000 | ||
-
Acquired an additional $24,000 from the issue of common stock.
-
Received $135,000 for providing services.
-
Paid $13,000 to creditors to reduce loan.
-
Paid expenses amounting to $62,000.
-
Paid a $13,500 dividend to the stockholders.
-
Determined that the market value of the land is $45,000.
- b-2. Prepare a statement of changes in stockholders’ equity for each year accounting period.
|
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Prepare a statement of changes in stockholders’ equity for the year 2019.
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Solutions
Expert Solution
| b-2) | ||
| MARK'S CONSULTING | ||
| Statement of Changes in Stockholders' Equity | ||
| For the Year Ended December 31, 2018 | ||
| Beginning common stock | $0 | |
| Add: Issue of Common Stock | $75,000 | |
| Ending common stock | $75,000 | |
| Beginning retained earnings | $0 | |
| Add: Net Income (see working note) | $55,000 | |
| Less: Dividends | $0 | |
| Ending Retained Earnings | $55,000 | |
| Total stockholders' equity | $130,000 | |
| Working notes: | ||
| Service revenue | $110,000 | |
| Less: Expenses | ($55,000) | |
| Net Income | $55,000 | |
| MARK'S CONSULTING | ||
| Statement of Changes in Stockholders' Equity | ||
| For the Year Ended December 31, 2019 | ||
| Beginning common stock | $75,000 | |
| Add: Issue of Common Stock | $24,000 | |
| Ending common stock | $99,000 | |
| Beginning retained earnings | $55,000 | |
| Add: Net Income (see working note) | $73,000 | |
| Less: Dividends | ($13,500) | |
| Ending Retained Earnings | $114,500 | |
| Total stockholders' equity | $213,500 | |
| Working notes: | ||
| Service revenue | $135,000 | |
| Less: Expenses | ($62,000) | |
| Net Income | $73,000 | |
ekkarill92 answered 1 year agoRelated Solutions
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