The equity sections for Atticus Group at the beginning of the year (January 1) and end of the year (December 31) follow. Stockholders’ Equity (January 1) Common stock—$5 par value, 100,000 shares authorized, 35,000 shares issued and outstanding $ 175,000 Paid-in capital in excess of par value, common stock 135,000 Retained earnings 340,000 Total stockholders’ equity $ 650,000 Stockholders’ Equity (December 31) Common stock—$5 par value, 100,000 shares authorized, 41,200 shares issued, 4,000 shares in treasury $ 206,000 Paid-in capital in excess of par value, common stock 178,400 Retained earnings ($30,000 restricted by treasury stock) 400,000 784,400 Less cost of treasury stock (30,000) Total stockholders’ equity $ 754,400 The following transactions and events affected its equity during the year. January 5 Declared a $0.50 per share cash dividend, date of record January 10. March 20 Purchased treasury stock for cash. April 5 Declared a $0.50 per share cash dividend, date of record April 10. July 5 Declared a $0.50 per share cash dividend, date of record July 10. July 31 Declared a 20% stock dividend when the stock’s market value was $12 per share. August 14 Issued the stock dividend that was declared on July 31. October 5 Declared a $0.50 per share cash dividend, date of record October 10. 5. How much net income did the company earn this year?

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter20: Corporations: Organization And Capital Stock

Section: Chapter Questions

Problem 5SEA: STOCKHOLDERS EQUITY SECTION After closing its books on December 31, Pro Parts stockholders equity...

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Question

The equity sections for Atticus Group at the beginning of the year (January 1) and end of the year (December 31) follow.

Stockholders’ Equity (January 1)
Common stock—$5 par value, 100,000 shares authorized, 35,000 shares issued and outstanding	$ 175,000
Paid-in capital in excess of par value, common stock	135,000
Retained earnings	340,000
Total stockholders’ equity	$ 650,000

Stockholders’ Equity (December 31)
Common stock—$5 par value, 100,000 shares authorized, 41,200 shares issued, 4,000 shares in treasury	$ 206,000
Paid-in capital in excess of par value, common stock	178,400
Retained earnings ($30,000 restricted by treasury stock)	400,000
	784,400
Less cost of treasury stock	(30,000)
Total stockholders’ equity	$ 754,400

The following transactions and events affected its equity during the year.

January 5	Declared a $0.50 per share cash dividend, date of record January 10.
March 20	Purchased treasury stock for cash.
April 5	Declared a $0.50 per share cash dividend, date of record April 10.
July 5	Declared a $0.50 per share cash dividend, date of record July 10.
July 31	Declared a 20% stock dividend when the stock’s market value was $12 per share.
August 14	Issued the stock dividend that was declared on July 31.
October 5	Declared a $0.50 per share cash dividend, date of record October 10.