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.(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             Answer     Answer     Dec. 7             Answer     Answer     Dec. 20 Answer                 Answer       (b) Compute retained earnings for 2017 assuming that the company reports 2017 net income of $523,000.   Please show you arrived to the answer

Question

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.

(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             Answer
 
  Answer
 
 
Dec. 7             Answer
 
  Answer
 
 
Dec. 20 Answer
 
         
 
  Answer
 
 
 


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

 

Please show you arrived to the answer

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