Answer:
Total Equity at 12/31/22 was: $3,600
Explanation:
As Rainbow company retained earnings as on 1/1/21 = $1,674
Equity shareholders = $2,680 - $1,674
= $1,006
Calculation of retained earnings as on 1/1/22 and 12/31/22
By adding $450 which is the net income for 2021 and subtracting the dividend declared and paid ($170) , we get
Retained earnings as on 1/1/22 = $1,954
By adding $210 net income for 2022, we get
Retained earnings as on 12/31/22 = $2,164
Equity shareholders as on 1/1/21 = $1,006
By adding $330 common stock issued in 2021 as well as adding $100 common stock issued in 2022, we get
Equity shareholders as on 12/31/2022 = $1,436
Total equity as on 12/31/22 = $2,164 + $1,436
Therefore total equity at 12/31/22 was $3,600
