Equity Accounts Ulrich Inc.’s articles of incorporation authorize the firm to issue 500,000 shares of $5 par value common stock, of which 410,000 shares have been issued. Those shares were sold at an average of 30 percent over par. In the quarter that ended last week, net income was $650,000; 30 percent of that income was paid as a dividend. The previous balance sheet showed a retained earnings balance of $3,545,000.

a. Create the equity statement for the company.

b. Suppose the company sells 25,000 of the authorized but unissued shares at the price of $4 per share. What will the new equity statement look like? LO.1