On January 1, 2018, Fascom had the following account balances in its shareholder

Question

On January 1, 2018, Fascom had the following account balances in its shareholders' equity accounts. Comson stock, $1 par, 254,eee shares issued Paid-in capital excess of par, common Paid-in capital excess of par, preferred Preferred stock, $180 par, 12,00 shares outstanding Retained earnings Treasury stock, at cost, 5,400 shares 254,900 508,688 128,000 1,200,ee0 2,400,8ee 8ee During 2013, Fascom Inc. had several transactions relating to common stock January 15: Declared a property dividend of 100,e00 shares of S1owdown Company (book value $19.4 p February 17: Distributed the property dividend. k value 510.4 per share, tair value 9.20 share) Aprii 1e: A 2-for-1 stock split was declared and distributed on outstanding common stock and effected dividend. The fair value of the stock was $4 on this date. July 18: Declared and distributed a 4% stock dividend on outstanding common stock . The fair value is 55 per share. December 1: Declared a se cents per share cash dividend on the outstanding common shares. December 20: Paid the cash dividend. Required: Assume net income is $540,000 for 2018. (Negative amounts should be entered with o minus sign.) Without preparing journal entries, prepare the shareholders' equity section of Fascom's balance sheet as of December 31. 2018. FASCOM Balance Sheet (Partial) December 31, 2018 Shareholders' equity

Explanation / Answer

FascomShareholders' Equity Preferred stock, 12,000 shares at $100 par $1,200,000 Common stock, (1) 522,488 shares at $1 par $        522,488 Paid-in capital - excess of par, preferred $        120,000 Paid-in capital - excess of par, common (2) $        587,552 Retained earnings (3) 1612296 Treasury stock, at cost; 5,400 shares(27,000) -27000 Total shareholders' equity $4,015,336 1 (254,000COMMON SHARES - 5,400 TREASURY SHARES) x 2 STOCK SPLIT = 497,200 x 1.04 STOCK DIVIDEND x $1PAR = $517,088 + (5,400 treasury shares at $1)=$522488 2 $508,000 + [(497,200 x 4%) x ($5 - $1)] = $587,552 3 $2,400,000 - (100,000 DIVIDEND SHARES x $9.20 FAIR VAUE) - [(254,000 - 5,400) x $1] - [(497,200 x 4%) x $5FAIR VALUE] - (517088 OUTSTANDING COMMON STOCK x $.50 CENTS) + $540,000 NET INCOME = $1,612,296

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