The statement of stockholders' equity shows the changes in the company's stockholders' equity accounts over a specific period. It includes information about common stock, retained earnings, dividends, and net income or loss. In this case, since no common stock was issued during the year, the common stock balance remains the same. The retained earnings balance starts at $7,100 and dividends of $1,000 were paid.
The statement of stockholders' equity shows the changes in the company's stockholders' equity accounts over a specific period. To prepare the statement of stockholders' equity, we start with the beginning balances of common stock and retained earnings. Then, we add any additional investments from common stock issuance and subtract any dividends paid. Finally, we add or subtract the net income or loss for the period.
In this case, as there were no issuances of common stock during the year, the common stock balance remains the same at $21,000. The retained earnings balance starts at $7,100. Since there was no information given about net income or loss, we cannot calculate it. However, we know that there was $1,000 worth of dividends paid. Therefore, the statement of stockholders' equity would be:
Common Stock: $21,000
Retained Earnings, beginning balance: $7,100
Add: Net Income or Loss (unknown)
Less: Dividends: $1,000 (negative)
Retained Earnings, ending balance (unknown)