Sentry Alarm, Inc., began the year with $19,000 of common stock and $22,600 of retained earnings. On

Question:

Sentry Alarm, Inc., began the year with $19,000 of common stock and $22,600 of retained earnings. On June 5, investors bought $12,000 of additional stock in the business. On September 22, the business purchased land valued at $65,000. The income statement for the year ended December 31, 2018, reported a net loss of $10,800. During this fiscal year, the business paid $275 for dividends each month.

Requirements

1. Prepare Sentry Alarm’s statement of retained earnings for the year ended December 31, 2018.

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...

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