The Digital Systems Company was organized two years ago to take advantage of an Internet opportunity. Investors paid $12 a share for 2 million shares with a $4 par value. In the next two years, the company had earnings of $2 million and $3 million, respectively. It paid dividends of 1.2 million and $1.3 million respectively, in those years. At the end of the first year, Digital sold another 500,000 shares of stock at $14 per share. Construct the equity section of Digital balance sheet initially and at the end of its first and second years in business.
The Digital Systems Company was organized two years ago to take advantage of an Internet opportunity. Investors paid $12 a share for 2 million shares with a $4 par value. In the next two years, the company had earnings of $2 million and $3 million, respectively. It paid dividends of 1.2 million and $1.3 million respectively, in those years. At the end of the first year, Digital sold another 500,000 shares of stock at $14 per share. Construct the equity section of Digital balance sheet initially and at the end of its first and second years in business.
Chapter14: Corporation Accounting
Section: Chapter Questions
Problem 4TP: On November 7, 2013, Twitter released its initial public offering (IPO) priced at $26 per share....
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The Digital Systems Company was organized two years ago to take advantage of an Internet opportunity. Investors paid $12 a share for 2 million shares with a $4 par value. In the next two years, the company had earnings of $2 million and $3 million, respectively. It paid dividends of 1.2 million and $1.3 million respectively, in those years. At the end of the first year, Digital sold another 500,000 shares of stock at $14 per share. Construct the equity section of Digital balance sheet initially and at the end of its first and second years in business.
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