Tommy began a business, and after collecting $5,600 from an equity investor and

Question

Tommy began a business, and after collecting $5,600 from an equity investor and borrowing $4,700 from a bank, he purchased a piece of land for $7,400. During the year, he leased the land to Sheila and received $3,200 in cash. He paid $2,200 cash for expenses during the year and paid an $1,300 dividend to the equity investor. Prepare a statement of shareholders' equity. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (4! Tommy's Business Statement of Shareholders' Equity For the Year Ended Commorn Stock Retained Earnings

Explanation / Answer

Answer

Tommy's Business

Statement of Shareholder's Equity

For the Year Ended

Common Stock

Retained earnings

Cash

$               5,600.00

$                                  -  

Rental Revenue from Land

$                     3,200.00 [increases Revenue – Net Income, hence added]

Expenses during the year

$                  (2,200.00) [decreases Net Income, hence deducted]

Dividends paid

$                  (1,300.00)

Ending Balance

$               5,600.00

$                      (300.00)

Tommy's Business

Statement of Shareholder's Equity

For the Year Ended

Common Stock

Retained earnings

Cash

$               5,600.00

$                                  -  

Rental Revenue from Land

$                     3,200.00 [increases Revenue – Net Income, hence added]

Expenses during the year

$                  (2,200.00) [decreases Net Income, hence deducted]

Dividends paid

$                  (1,300.00)

Ending Balance

$               5,600.00

$                      (300.00)

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---