the following is selected financial information for osmond dental laboratories for 2024 and 2025:\n| | 2024…
the following is selected financial information for osmond dental laboratories for 2024 and 2025:\n| | 2024 | 2025 |\n|--|--|--| \n| retained earnings, january 1 | $58,000 |? |\n| net income | 40,000 | 43,000 |\n| dividends | 15,000 | 23,000 |\n| common stock | 77,000 |? |\nrequired:\nosmond issued 5,000 shares of additional common stock in 2025 for $30,000. there were no other stock transactions. prepare a statement of stockholders equity for the year ended december 31, 2025.\nnote: amounts to be deducted should be indicated with minus sign.\nosmond dental laboratories\nstatement of stockholders equity\nfor the year ended december 31, 2025\n| | common stock | retained earnings | total stockholders equity |\n|--|--|--|--| \n| balance, january 1, 2025 | | | |\n| | | | |\n| | | | |\n| balance, december 31, 2025 | | | |
Answer
Explanation:
Step1: Calculate beginning retained earnings for 2025
The beginning retained earnings for 2025 is the ending retained earnings for 2024. Using the formula: Ending Retained Earnings = Beginning Retained Earnings+Net Income - Dividends. For 2024, Beginning Retained Earnings = $58,000$, Net Income = $40,000$ and Dividends = $15,000$. So, Ending Retained Earnings for 2024 (Beginning for 2025) = $58000 + 40000-15000=83000$.
Step2: Calculate ending retained earnings for 2025
Using the formula Ending Retained Earnings = Beginning Retained Earnings+Net Income - Dividends. Here, Beginning Retained Earnings = $83,000$, Net Income = $43,000$ and Dividends = $23,000$. So, Ending Retained Earnings = $83000 + 43000-23000 = 103000$.
Step3: Calculate beginning common - stock for 2025
The beginning common - stock for 2025 is the ending common - stock for 2024, which is $77,000$.
Step4: Calculate ending common - stock for 2025
The company issued 5000 shares of additional common stock for $30,000$ in 2025. So, Ending Common Stock = Beginning Common Stock+Stock Issued = $77000 + 30000=107000$.
Step5: Calculate beginning total stockholders' equity for 2025
Beginning Total Stockholders' Equity=Beginning Common Stock + Beginning Retained Earnings = $77000+83000 = 160000$.
Step6: Calculate ending total stockholders' equity for 2025
Ending Total Stockholders' Equity=Ending Common Stock + Ending Retained Earnings = $107000+103000 = 210000$.
| Common Stock | Retained Earnings | Total Stockholders' Equity | |
|---|---|---|---|
| Balance, January 1, 2025 | $77,000$ | $83,000$ | $160,000$ |
| Issuance of common stock | $30,000$ | $0$ | $30,000$ |
| Net income | $0$ | $43,000$ | $43,000$ |
| Dividends | $0$ | $- 23,000$ | $-23,000$ |
| Balance, December 31, 2025 | $107,000$ | $103,000$ | $210,000$ |
Answer:
| Common Stock | Retained Earnings | Total Stockholders' Equity | |
|---|---|---|---|
| Balance, January 1, 2025 | $77,000$ | $83,000$ | $160,000$ |
| Issuance of common stock | $30,000$ | $0$ | $30,000$ |
| Net income | $0$ | $43,000$ | $43,000$ |
| Dividends | $0$ | $- 23,000$ | $-23,000$ |
| Balance, December 31, 2025 | $107,000$ | $103,000$ | $210,000$ |