Analyze equity accounts. (LO 1, 2, 3, 5)

The following balances were shown on the year-end balance sheets for 2006 and 2007 for Columbia Company. For each item, give the most likely reason for the change from one year to the next.

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12/31/06 Common stock $ 45,000 $200,000 Paid-in-capital Retained earnings Treasury stock $182,500 12/31/07 $ 50,000 $230,000 *$200,000 $ (3,450) $ (5,450) *Net income for the year was $20,000. Explanation