Identifying and Analyzing Financial Statement Effects of DividendsThe stockholders' equity of Hammel Company at December 31, 2016, is shown below. 5% preferred stock, $100 par value, 10,000 shares authorized; 6,000 shares issued and outstanding $600,000 Common stock, $5 par value, 200,000 shares authorized; 70,000 shares issued and outstanding 350,000 Paid-in capital in excess of par value—preferred stock 50,000 Paid-in capital in excess of par value—common stock 400,000 Retained earnings 747,000 Total stockholders' equity $2,147,000 The following transactions, among others, occurred during 2017:Apr. 1 Declared and issued a 100% stock dividend on all outstanding shares of common stock. The market value of the stock was $14 per share.Dec. 7 Declared and issued a 4% stock dividend on all outstanding shares of common stock. The market value of the stock was $17 per share.Dec. 20 Declared and paid (1) the annual cash dividend on the preferred stock and (2) a cash dividend of 90 cents per common share. Please complete the blanks and show the calculations(a) Use the financial statement effects template to indicate the effects of these separate transactions. Use negative signs with answers, when appropriate. Balance Sheet Transaction Cash Asset + Noncash Assets = Liabilities + Contributed Capital + Earned Capital Apr. 1 Dec. 7 Dec. 20 Income Statement Revenue - Expenses = Net Income (b) Compute retained earnings for 2017 assuming that the company reports 2017 net income of $523,000.$

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 67E: Cash Dividends on Common and Preferred Stock Lemon Inc. has the following information regarding its...

See similar textbooks

Related questions

Question

Identifying and Analyzing Financial Statement Effects of Dividends
The stockholders' equity of Hammel Company at December 31, 2016, is shown below.

5% preferred stock, $100 par value, 10,000 shares authorized; 6,000 shares issued and outstanding	$600,000
Common stock, $5 par value, 200,000 shares authorized; 70,000 shares issued and outstanding	350,000
Paid-in capital in excess of par value—preferred stock	50,000
Paid-in capital in excess of par value—common stock	400,000
Retained earnings	747,000
Total stockholders' equity	$2,147,000

The following transactions, among others, occurred during 2017:
Apr. 1 Declared and issued a 100% stock dividend on all outstanding shares of common stock. The market value of the stock was $14 per share.
Dec. 7 Declared and issued a 4% stock dividend on all outstanding shares of common stock. The market value of the stock was $17 per share.
Dec. 20 Declared and paid (1) the annual cash dividend on the preferred stock and (2) a cash dividend of 90 cents per common share.

Please complete the blanks and show the calculations
(a) Use the financial statement effects template to indicate the effects of these separate transactions.

Use negative signs with answers, when appropriate.

	Balance Sheet
Transaction	Cash Asset	+	Noncash Assets	=	Liabilities	+	Contributed Capital	+	Earned Capital
Apr. 1	________		________		________		________		________
Dec. 7	________		________		________		________		________
Dec. 20	________		________		________		________		________

Income Statement
Revenue	-	Expenses	=	Net Income
________		________		________
________		________		________
________		________		________

(b) Compute retained earnings for 2017 assuming that the company reports 2017 net income of $523,000.
$________

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 4 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions