Changes in Shareholders\' Equity On January 1, 2016, the Osgood Film Studios rep

Question

Changes in Shareholders' Equity On January 1, 2016, the Osgood Film Studios reported the following alphabetical list of shareholders' equity items: Additional paid-in capital on common stock $158,950 Additional paid-in capital on preferred stock 19,400 Common stock, $2 par 74,800 Preferred stock, $100 par 97,000 Retained earnings 238,000

During 2016, the company sold 2,700 shares of common stock for $14 per share and 250 shares of preferred stock for $129 per share. It also earned income of $81,000 and paid dividends of $10 per share on the preferred stock and $2.90 per share on the common stock outstanding at the end of 2016. Required: Prepare Osgood's statement of shareholders' equity (include retained earnings) for 2016.

Preferred
Stock
$100 parCommon Stock $2 parAdditional
Paid-in Capital
on Preferred StockAdditional
Paid-in Capital
on Common StockRetained

Earnings

TotalBalances, 1/1/16 $$$$$$Common stock issued Preferred stock issued Net income Cash dividend paid on preferred Cash dividend paid on common Balances, 12/31/16 $$$$$$

Explanation / Answer

**Stockholders equity = preferred stock +common stock +Paid in capital-preferred +paid in capital -common +retained earning

= 97000+74800+19400+158950+238000

= 588150

**Preferred shares outstanding on date of dividend = 970beginning+250= 1220             [97000/100]

**common shares outstanding on date of dividend = 37400 beginning +2700= 40100    [74800/2]

Stockholders equity TotalBalances, 1/1/16 588150 Common stock issued 37800    [ 2700*14] Preferred stock issued 32250    [250*129] Net Income 81000 cash dividend paid on preferred (12200) Cash dividend paid on common Balances (116290)      [40100*2.9] 22560 stockholders equity 12/31/16 610710

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