Question The following transactions apply to Baker Co. for 2010, its first year

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The following transactions apply to Baker Co. for 2010, its first year of operations.

1. Issued $180,000 of common stock for cash.

2. Provided $88,000 of services on account.

3. Collected $74,000 cash from accounts receivable.

4. Loaned $13,000 BBC on September 1, 2010. The note had a one-year term to maturity and an 8 percent interest rate.

5. Paid $36,000 of salaries expense for the year.

6.Paid a $3,500 dividend to the stockholders.

7. Recorded the accrued interest on December 31, 2010 (see item 4).

8. Uncollectible accounts expense is estimated to be 1 percent of sales on account.

Make a Statement of Changes in Stockholder's Equity using above information

Explanation / Answer

Baker Co. Statement of changes in stockholder's equity for the year ended 2010 Share Capital Retained Earning Total Equity Balance at 01.01.2010 Issued Common Stock 180000 180000 Provided for services -88000 -88000 Collected from Account Receivables 74000 74000 Salaries paid -36000 -36000 Dividend paid -3500 -3500 Interest accrued -347 -347 Uncollectible account expenses -740 -740 Balance at 31.12.2010 180000 -54587 125413

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