As of December 31, 2013, Zip Express Company had total assets of $80,000, total liabilities of $20,000,

Question:

As of December 31, 2013, Zip Express Company had total assets of $80,000, total liabilities of $20,000, and common stock of $25,000.

Required

a. Determine the amount of retained earnings as of December 31, 2013, after closing.

b. Explain the difference between common stock and retained earnings.

c. On January 1, 2014, Zip Express raised $50,000 by issuing additional common stock. Immediately after the additional capital was raised, Zip Express reported total equity of $110,000.

Are the stockholders of Zip Express in a better financial position than they were on December 31, 2013?

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...