Use the following information to answer:
Marvin's Mechanical Repair Shop started the year with total assets of $60,000, total liabilities of $40,000, and retained earnings of $18,000. During the year, the business recorded $100,000 in auto repair revenues, $70,000 in expenses, and the company paid dividends of $15,000.
-If Marvin's Mechanical Repair Shop ends the year with total assets of $80,000, and total liabilities of $35,000, what must be the amount of common stock issued during the year?

Question

Quizplus · Accepted Answer

End of year stockholders' equity = Total assets - Total liabilities
= ($80,000 - $35,000 = $45,000)
End of year retained earnings = Start of year retained earnings + Net income - Dividends
= ($18,000 + ($100,000 - $70,000) - $15,000 = $33,000.)
End of the year common stock = Year-end stockholders' equity - Year-end retained earnings
= ($45,000 - $33,000 = $12,000)
Start of year common stock = Start of year stockholders' equity - Start of year retained earnings
= (($60,000 - $40,000) - $18,000 = $2,000).
Common stock issued during the year = End of year common stock - Start of year common stock
= ($12,000 - $2,000 = $10,000)

Use the Following Information to Answer