The December 31, 2014 stockholders\' equity section of Cedar, Inc. is as follows

Question

The December 31, 2014 stockholders' equity section of Cedar, Inc. is as follows: (10 Points)

  

Preferred Stock, 5%, $20 par, 600 Shares authorized, 200 shares issued   $4,000

Additional paid-in capital- preferred 8,000  

Common stock, $1 par, 4,000 shares authorized, 1,000 shares issued        1,000

Additional Paid-in capital-common 10,000

Retained earnings 22,000

Total $45,000

Treasury stock (50 Common Shares at cost) 8,000

     Total Stockholders' Equity $37,000

The market price of the common stock on December 31, 2014, was $10 per share. Answer the following independent questions:

1. What will the balance in the retained earnings account be immediately after the declaration of a 2-for-1 stock split?
2. If a cash dividend of $1 per share was declared to both common and preferred shareholders, what will the balance be in retained earnings immediately after the declaration?
3. What balance will be in the retained earnings account immediately after the declaration of a 20% common stock dividend on December 31, 2010?

31. The following information related to comparative balance sheets is available for Metro Corporation: (10 points)

Additional selected information from the income statement was also provided:
1. Depreciation expense of $20,000
2. A loss on sale of equipment $3,500
3. Net income $122,000
Prepare the cash flows from operating activities using the indirect method.

Increase in Cash 50,000 Decrease in accounts receivable (15,000) Decrease in Inventory (25,000) Increase in prepaid insurance 11,000 Increase in accounts payable 10,000

Explanation / Answer

Answer:30

1. Retained earning will be same

2.Common devidend=1000*$1=$1000

Preferred dividend=200*$1=$200

Balance in retained earnings=22000-1200=20800

3.1000*20%*$10=2000

Balance in retained earnings=22000-2000=20000

Answer:31

Metro Corporation Particulars Amount ($) Net income 122000 Adjustment: Depreciation expense 20000 Loss on sale of equipment 3500 Decrease in accounts receivable 15000 Decrease in Inventory 25000 Increase in prepaid insurance -11000 Increase in accounts payable 10000 Cash flow from operating activities 184500

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