Question The general ledger of Robichaud Corporation, a publicly traded company,

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Question The general ledger of Robichaud Corporation, a publicly traded company, contained the following shareholders' equity accounts in 2015: Preferred shares (11,910 and 20,540 shares issued, respectively) Common shares (314,300 and 370,100 shares issued, respectively) Stock dividends distributable Retained earnings January 1 December 31 $595,500 $1,027,000 2,514,4003,742,000 444,120 3,320,220 2,978,900 A review of the accounting records for the year ended December 31, 2015, reveals the following information: 1. 2. 3. 4. On January 1,8,630 $4 noncumulative preferred shares were issued for $50 each. An unlimited number are authorized. On October 1, 55,800 common shares were sold for cash at $22 per share. An unlimited number are authorized. The annual preferred shareholders' cash dividend was declared and paid during the year. On December 31, a 5% stock dividend was declared on common shares when the share price was $24. The stock dividend is distributable on January 20 Profit for the year was $867,600. On December 31, the board of directors authorized a $568,400 restriction on retained earnings for a plant expansion. 5. 6.

Explanation / Answer

ans preferred Shares Calculation Beg bal 595500 1) Jan 1 Cash 431500 8630*50 end bal 1027000 Common shares Calculation Beg bal 2514400 2) Oct 1 Cash 1227600 55800*22 end bal 3742000 Stock dividend distributable 4) Dec 31 Stock dividend 444120 end bal 444120 Stock dividend 4) Dec 31 Stock dividend 444120 Retained earnings 444120 end bal 0 Retained eranings 3) Cash Dividend 82160 Beg bal 2978900 4) Stock dividend 444120 5) 31 Dec Income summary 867600 end bal 3320220 Cash Dividend 20540*4 82160 Statement of Financial position Dec 31 2015 Shareholder equity Capital shares Preferred shares 1027000 Common shares 3742000 Stock dividend distributabke 444120 4186120 Total capital shares 5213120 Reatined Earnings 3320220 Total shareholder Equity 8533340

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