Question

statement of stockholders equity
financial information related to organic products company for the month ended june 30, 20y9, is as follows:
net income for june $115,000
dividends paid in june 25,000
common stock, june 1, 20y9 180,000
common stock issued in june 50,000
retained earnings, june 1, 20y9 1,630,000
organic products company
statement of stockholders equity
for the month ended june 30, 20y9
line item description common stock retained earnings total
a. prepare a statement of stockholders equity for the month ended june 30, 20y9. if an amount box does not require an entry, leave it blank.
b. why is the statement of stockholders equity prepared before the june 30, 20y9, balance sheet? the statement of stockholders equity is prepared before the june 30, 20y9, balance sheet because as of june 30, 20y9, are needed for the june 30, 20y9, balance sheet.

Explanation:

Step1: Recall statement of stockholders' equity formula

The statement of stockholders' equity formula for ending retained - earnings is: Ending Retained Earnings=Beginning Retained Earnings + Net Income−Dividends. Here, we are preparing the statement, and we know the beginning retained earnings, net income, and dividends.

Step2: Calculate ending retained earnings

Beginning retained earnings = $1,630,000$, Net income = $115,000$, Dividends = $25,000$.
Ending Retained Earnings=$1,630,000 + 115,000-25,000$
=$1,720,000$

The statement of stockholders' equity for Organic Products Company for the month ended June 30, 20Y9:

Line Item Description	Amount
Common Stock, June 1, 20Y9	$180,000$
Dividends paid in June	$25,000$
Net income for June	$115,000$
Retained earnings, June 1, 20Y9	$1,630,000$
Retained earnings, June 30, 20Y9	$1,720,000$
Total Stockholders' Equity	$1,950,000$ ($180,000 + 50,000+1,720,000$)

b. The statement of stockholders' equity is prepared before the balance sheet because the ending - balances of stockholders' equity components (such as retained earnings and common stock) calculated in the statement of stockholders' equity are needed to complete the stockholders' equity section of the balance sheet.

Answer:

a.

Line Item Description	Amount
Retained Earnings	$1,720,000$
Total	$1,950,000$

b. The statement of stockholders' equity is prepared before the balance sheet because the ending balances of equity accounts calculated in it are used in the stockholders' equity section of the balance sheet.