Question 2 (of 4 value 800 points The following account balances were selected f

Question

Question 2 (of 4 value 800 points The following account balances were selected from the records of beverage maker Blake Corporation at December 31 after all adjusting entries were completed Common stock (par $15 authorized 100,000 shares, issued 45,000 shares of which 1,100 shares are held as treasury stodk) Additional paid-in capital-common stod Dividends Retained earnings, beginning of year Treasury stok at cost (1,100 shares) $875.000 190,000 38,000 86,000 22,000 Net income for the year was $83,000 Required 1-a. Prepare the statement of retained earnings for the year ended Deoember 31 BLAKE Statement of Retained Earnings For the Year Ended 31 Retained Earnings, January 1 Retained Earnings, Deoember 31 1-b. Prepare the stookholders equity seation of the balanoe sheet at December 31. (Amounts to be deducted should be indicated by a minus sign.)

Explanation / Answer

Answer 1-a. BLAKE CORPORATION Statement of Retained Earnings For the Year Ended Dec 31 Retained Earnings - Jan 1            86,000 Less: Dividends          (38,000) Add: Net Income            63,000 Retained Earnings - Dec 31          111,000 Answer 1-b. BLAKE CORPORATION Balance Sheet (Partial) At Dec 31 Stockholders' Equity Common Stock (Par $15, Authorized 100,000 shares, issued 45,000 shares)          675,000 Additional Paid in Capital - Common Stock          190,000 Total Contributed Capital          865,000 Retained Earnings          111,000          976,000 Less: Treasury Stock - 1,100 Shares          (22,000) Total Stockholders' Equity          954,000 Answer 2. No. of Shares that received Dividends = 45,000 Shares (issued Stock) - 1,100 shares (Treasury Stock) No. of Shares that received Dividends = 43,900 Shares Answer 3. ROE = Net Profit / Average Stockholders' Equity Avg. Stockholders Equity = ($639,000 + $954,000)/2 Avg. Stockholders Equity = $796,500 ROE = $63,000 / $796,500 ROE = 7.9% (Approx.)

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.