Question

Sheridan Co. reports the following information for 2020: sales revenue $766,600, cost of goods sold $524,400, operating expenses $86,300, and an unrealized holding loss on available-for-sale debt securities for 2020 of $53,500. It declared and paid a cash dividend of $14,110 in 2020. Sheridan Co. has January 1, 2020, balances in common stock $355,100; accumulated other comprehensive income $82,800; and retained earnings $94,670. It issued no stock during 2020. (Ignore income taxes.) Prepare a statement of stockholders’ equity.

Answer 1

Step-by-step explanation:

The statement of stockholder's equity comprises common stock and retained earnings. The ending balance after adjustment shown in the attached spreadsheet.

The ending balance of retained earning = Beginning balance of retained earnings + net income - dividend paid

And, the ending balance of the common stock = Beginning balance of common stock + issued shares

Before preparation, first, we have to compute the net income which is shown below:

Net income = Sales revenue - cost of goods sold - operating expenses

= $766,600 - $524,400 - $86,300

= $155,900

The preparation of the statement of stockholders’ equity is presented in the spreadsheet. Kindly find the attachment below: