Project 3: Stockholders\' Equity (10 points) Required: Answer the questions on t
ID: 2519363 • Letter: P
Question
Project 3: Stockholders' Equity (10 points) Required: Answer the questions on the following page in this booklet and turn in the entire booklet at the beginning of class on the date specified by your instructor. Shown below is the stockholders' equity section of Tiny Tot's stockholders' equity section of the balance sheet at December 31, 2017: Common stock, $1 par value, 5,000,000 shares authorized, 670,000 shares issued and outstanding Additional paid-in capital Retained earnings $670,000 1,420,000 2900,000 $4,990,000 Total stockholders' equity During 2018, the following events occurred: Tiny Tot's was authorized to sell 100,000 shares of $100 par, 8% preferred stock Tiny Tot's sold 15,000 shares of the preferred stock at its par value A cash dividend of $300,000 was declared and paid Tiny Tot's declared and issued a 10% stock dividend on the common stock when the market value of the stock was $13 per share Net income for the year was $1,740,000Explanation / Answer
Note : Since the question does not mention wether cash dividends also include the preferred dividend or not. So, I have given solution with both assumption Assumption 1 Cash dividends include preferred dividend Assumption 2 Cash dividends does not include preferred dividend Solution with Assumption 1 Solution with Assumption 2 Capital Stock, as of December 31, 2018; # of common shares authorizsed $1 par 5000000 5000000 # of common shares issued and outstanding 737000 A 737000 # of preferred shares issued and outstanding 1500000 B 1500000 Amount of cash dividends to common stockholders 180000 180000 Amount of cash dividends to preferred stockholders 120000 300000 Total debit to stock dividends account 871000 871000 Additional paid in capital, at December 31, 2018 2224000 C 2224000 Retained earnings, at January 1, 2018 2900000 2900000 Retained earnings, at December 31, 2018 3469000 D 3289000 Total stockholder's equity, at December 31, 2018 7930000 A+B+C+D 7750000 WE appreciate rating of our answers. It really encourages us. Thank You.
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