Question

Mijka Company was started on January 1, 2018. During 2018, the company experienced the following three accounting events: (1) earned cash revenues of $28,600, (2) paid cash expenses of $13,200, and (3) paid a $1,500 cash dividend to its stockholders. These were the only events that affected the company during 2018.

create an Statement of Changes in Stockholders' Equity

Answer 1

To create the Statement of Changes in Stockholders' Equity for Mijka Company, you calculate the net income by subtracting expenses from revenues, and then deduct the dividends paid. The remaining amount represents the ending stockholders' equity for 2018.

Step-by-step explanation:

To create a Statement of Changes in Stockholders' Equity for Mijka Company, we'll start with the beginning balance in equity, which is typically the initial investment. Since no information is provided about initial investment, we'll assume equity begins at zero. Next, we add the net income, which is revenues minus expenses. Finally, we subtract dividends paid to stockholders.

1. Beginning Stockholders' Equity: $0 (Assumption as no initial investment is mentioned)
2. Add: Net Income ($28,600 revenues - $13,200 expenses) = $15,400
3. Less: Dividends Paid = $1,500
4. Ending Stockholders' Equity: $13,900 (Beginning equity + Net Income - Dividends)

Based on these events, the Statement of Changes in Stockholders' Equity would show:

• Beginning Stockholders' Equity: $0
• Total Revenues: $28,600
• Total Expenses: $13,200
• Net Income: $15,400
• Dividends Paid: $1,500
• Ending Stockholders' Equity: $13,900

Note: If there were any other changes in stockholders' equity, such as new stock issued, those would also need to be included in the statement. Since no such events are mentioned, they aren't actually included in this example.