E4-11 Changes in Stockholders’ Equity On January 1, 2016 the Powder Company list
ID: 2419388 • Letter: E
Question
E4-11 Changes in Stockholders’ Equity On January 1, 2016 the Powder Company listed the following stockholders’ equity section of its balance sheet:
Contributed Capital
Preferred stock, $100 par $92800
Common stock, $5 par $37400
Additional paid-in capital on preferred stock $21500
Additional paid-in capital on common stock $58700
Total contributed capital $210400
Retained Earnings $185700
Total Stockholders’ Equity $396100
During 2016, the following transactions and events occurred and were properly recorded:
The company issued 1,800 shares of common stock at $13 per share.
The company issued 340 shares of preferred stock at $130 per share.
The company earned net income of $38,950.
The company paid a $7 per share dividend on the preferred stock and a $1 per share dividend on the common stock out- standing at the end of 2016.
Required
Prepare a statement of changes in stockholders’ equity of the Powder Company for 2016. (Include retained earnings.)
Explanation / Answer
statement of changes in stockholders’ equity of the Powder Company for 2016. Common stock Additional Capital reserve Treasury stock Retained earnings Revaluation surplus Total paid-in capital Balance as at 1-1-16 37400 58700 185700 281800 Issue of bonus shares Issue of new shares 9000 14400 23400 Net income 38,950.00 38950 Transfer to capital reserve Dividends -18156 -18156 Share buyback Reversal of revaluation Balance as at 30-Jun-14 46400 73100 206494 325994 Dividend working Shares dividend per share Dividend preferred shares 1268 7 8876 Common stock 9280 1 9280 18156
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