Comparative statements of shareholders’ equity for Anaconda International Corpor

Question

Comparative statements of shareholders’ equity for Anaconda International Corporation were reported as follows for the fiscal years ending December 31, 2018, 2019, and 2020.

Required:
1. Infer from the statements the events and transactions that affected Anaconda International Corporation’s shareholders’ equity during 2018, 2019, and 2020. Prepare the journal entries that reflect those events and transactions.
2. Prepare the shareholders’ equity section of Anaconda’s comparative balance sheets at December 31, 2020 and 2019.

ANACONDA INTERNATIONAL CORPORATION
Statements of Shareholders' Equity
For the Years Ended Dec. 31, 2018, 2019, and 2020
($ in millions) Preferred Stock
$10 par Common Stock
$1 par Additional
Paid-In Capital Retained Earnings Total
Shareholders' Equity Balance at January 1, 2018 75 450 1,904 2,429 Sale of preferred shares 30 960 990 Sale of common shares 9 54 63 Cash dividend, preferred (3 ) (3 ) Cash dividend, common (19 ) (19 ) Net income 360 360 Balance at December 31, 2018 30 84 1,464 2,242 3,820 Retirement of shares (4 ) (24 ) (20 ) (48 ) Cash dividend, preferred (3 ) (3 ) Cash dividend, common (23 ) (23 ) 3-for-2 split effected in the
form of a dividend 15 (15 ) Net income 510 510 Balance at December 31, 2019 45 80 1,425 2,706 4,256 Common stock dividend 7 47 (54 ) Cash dividend, preferred (3 ) (3 ) Cash dividend, common (25 ) (25 ) Net income 552 552 Balance at December 31, 2020 45 87 1,472 3,176 4,780

Explanation / Answer

JOURNAL ENTRY Year Account Title Debit Credit 2018 Cash $990,000,000 Preferred stock $30,000,000 ($10 per share) Additional paid in capital-Preferred stock $960,000,000 ($320 per share) (To record Issue of 3 million preferred shares at $330 per share) 2018 Cash $63,000,000 Common Stock $9,000,000 ($1 per share) Additional paid in capital-Common Stock $54,000,000 ($6 per share) (To record issue of 9million common shares at $7 each) 2018 Retained earnings $3,000,000 Cash $3,000,000 (To record payment of cash dividend of $1 per preferred share) 2018 Retained earnings $19,000,000 Cash $19,000,000 (To record payment of cash dividend for common stock) 2018 Net Income $360,000,000 Retained Earnings $360,000,000 (To transfer net income to retained earnings) 2019 Common Stock $4,000,000 Additional Paid up Capital $24,000,000 Retained earnings $20,000,000 Cash $48,000,000 ( To recordv retirement of 4 million common shares) 2019 Retained earnings $3,000,000 Cash $3,000,000 (To record payment of cash dividend of $1 per preferred share) 2019 Retained earnings $23,000,000 Cash $23,000,000 (To record payment of cash dividend for common stock) 2019 Retained Earnings $15,000,000 Preferred stock $15,000,000 (To recordv 3 for 2 split effected in the form of dividend) 2019 Net Income $510,000,000 Retained Earnings $510,000,000 (To transfer net income to retained earnings) 2020 Retained earnings $54,000,000 Common Stock $7,000,000 Additional Paid in Capital $47,000,000 (To record stock dividend on Common Shares) 2020 Retained earnings $3,000,000 Cash $3,000,000 (To record payment of cash dividend of $1 per preferred share) 2020 Retained earnings $25,000,000 Cash $25,000,000 (To record payment of cash dividend for common stock) 2020 Net Income $552,000 Retained Earnings $552,000 (To transfer net income to retained earnings) SHAREHOLDERS EQUITY SECTION .Dec31, 2010 .Dec31,2019 Preferred Stock,$10 par Value,4,500,000shares authorised issued and outstanding $45,000,000 $45,000,000 Common stock, $1 par value 87,000,000shares issued ands outstanding $87,000,000 $80,000,000 Additional paid in capital $1,472,000,000 $1,425,000,000 Retained earnings $3,176,000,000 $2,706,000,000 Total stockholders equity $4,780,000,000 $4,256,000,000

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.