Certified Security, Inc., began the year with $35,000 of common stock and $32,400 of retained earnings. On

Question:

Certified Security, Inc., began the year with $35,000 of common stock and $32,400 of retained earnings. On May 5, investors bought $8,000 of additional stock in the business. On August 22, the business purchased land valued at $23,000. The income statement for the year ended December 31, 2016, reported net income of $52,300. During this fiscal year, the business paid $4,000 each month for dividends.

Requirements

1. Prepare Certified Security's statement of retained earnings for the year ended December 31, 2016.

2. Did the retained earnings of the business increase or decrease during the year? What caused this change?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...