50.1K
Verified Solution
Link Copied!
Accounting for Shareholders Equity Transactions
The shareholders equity section of the consolidated balance sheet of Perry Corporation appeared as follows at the beginning of the year.
| Common stock, $1.00 par value | | | $ 100,000 |
| Additional paid-in-capital | | | 1,200,000 |
| Convertible preferred stock, no par value | | | 800,000 |
| Retained deficit | | | (600,000) |
| Treasury stock | | | (250,000) |
| Sharholders' equity | | | $1,250,000 |
The following transactions occurred during the year:
1. Generated net income of $80,000.
2. Paid cash dividends of $220,000.
3. Issued a ten percent common stock dividend; the fair value of the stock was $10 per share at this time.
4. Declared and issued a 2-for-1 forward stock split.
5. Converted 10,000 shares of convertible preferred stock with a book value of $300,000 into 30,000 shares of common stock.
Prepare the shareholders equity section of the balance sheet of Perry Corporation at year-end.
Use negative signs with answers that reduce the balance and/or a Total that reduces the overall balance of the Shareholders' equity.
| Transaction | Common Stock at Par | Additional Paid-in-Capital | Preferred Stock, No-Par | Retained Earnings | Treasury Stock |
| Beginning Balance | $ 100,000 | $ 1,200,000 | $ 800,000 | $ (600,000) | $ (250,000) |
| 1 | Answer | Answer | Answer | Answer | Answer |
| 2 | Answer | Answer | Answer | Answer | Answer |
| 3 | Answer | Answer | Answer | Answer | Answer |
| 4 | Answer | Answer | Answer | Answer | Answer |
| 5 | Answer | Answer | Answer | Answer | Answer |
| Total | $ Answer | $ Answer | $ Answer | $ Answer | $ Answer |
Answer & Explanation
Solved by verified expert
