Financial & Managerial Accounting
14th Edition
ISBN: 9781337515498
Author: WARREN
Publisher: Cengage
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Chapter 12, Problem 12.21EX
To determine
Stockholders’ Equity Section: It is refers to the section of the
To list: The identified errors in the stockholders’ equity section of the balance sheet.
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List the errors in the following Stockholders' Equity section of the balance sheet prepared
as of the end of the current year:
Stockholders' Equity
Paid-in capital:
Preferred 2% stock, $80 par (125,000 shares
authorized and issued)....
Excess of issue price over par.
Retained earnings....
Treasury stock (75,000 shares at cost)
Dividends payable...
Total paid-in capital
$10,000,000
$ 10,500,000
96,700,000
500,000
1,755,000
430,000
$ 109,385,000
Common stock, $20 par (1,000,000 shares authorized,
825,000 shares issued).....
17,655,000
Organizing costs ....
Total stockholders'equity..
300,000
$127,340,000
... ...
The stockholder's equity section of the balance sheet contains.
.common stock
.preferred stock
.Additional stock
.other accumulated comprehensive income.
.Retained earnings
It is important to understand how changes in the accounts impact the balance sheet and the financial position of the organization
Genaing inc.has $200,000 of 5%, $10 par value preferred stock and $450,000 of $5 par value common stock issued and outstanding Dec. 31,2021
There were no stock issuance, stock splits or stoxk dividends for 2021. The organization's calender end is on Dec.31 2021.
Preferred stock did not receive any dividends for 2019 or 2020 because the company did not have enough cash reserves to pay out dividends.
The preferred stock has a mix characteristics .10% of the preferred stock is noncumulative, nonparticipating
.20% of the preferred stock is cumulative, nonparticipating
.20% of the preferred stock is noncumulative ,participating
.50 of the preferred stock is cumulative, participating
The…
Stockholders' Equity Section of Balance Sheet
The following Stockholders' Equity section of the balance sheet prepared as of the end of the current year contains errors.
Stockholders’ Equity
Paid-in capital:
Preferred 2% stock, $80 par (125,000 shares authorized and issued)
$10,000,000
Excess of issue price over par
500,000
Paid-in capital, preferred stock
$10,500,000
Retained earnings
96,700,000
Treasury stock (75,000 shares at cost)
1,755,000
Dividends payable
430,000
Total paid-in capital
$109,385,000
Common stock, $20 par (1,000,000 shares authorized, 825,000 shares issued)
17,655,000
Organizing costs
300,000
Total stockholders' equity
$127,340,000
Prepare a corrected Stockholders' Equity section.
Stockholders' Equity
Paid-In Capital:
$fill in the blank 2
fill in the blank 4
$fill in the blank 6
$fill in the blank 8
fill in the blank 10
fill in the blank 12
Total paid in…
Chapter 12 Solutions
Financial & Managerial Accounting
Ch. 12 - Of two corporations organized at approximately the...Ch. 12 - A stockbroker advises a client to buy preferred...Ch. 12 - A corporation with both preferred stock and common...Ch. 12 - An owner of 2,500 shares of Simmons Company common...Ch. 12 - Prob. 5DQCh. 12 - Prob. 6DQCh. 12 - A corporation reacquires 60,000 shares of its own...Ch. 12 - The treasury stock in Discussion Question 7 is...Ch. 12 - What are the three classifications of restrictions...Ch. 12 - Prob. 10DQ
Ch. 12 - Dividends per share Zero Calories Company has...Ch. 12 - Entries for issuing stock On January 22, Zentric...Ch. 12 - Entries for cash dividends The declaration,...Ch. 12 - Entries for stock dividends Alpine Energy...Ch. 12 - Entries for treasury stock On May 27, Hydro...Ch. 12 - Reporting stockholders equity Using the following...Ch. 12 - Retained earnings statement Noric Cruises Inc....Ch. 12 - Dividends per share Seventy-Two Inc., a developer...Ch. 12 - Dividends per share Lightfoot Inc., a software...Ch. 12 - Entries for issuing par stock On January 22,...Ch. 12 - Entries for issuing no-par stock On May 15, Helena...Ch. 12 - Issuing stock for assets other than cash On...Ch. 12 - Selected stock transactions Alpha Sounds Corp., an...Ch. 12 - Issuing stock Willow Creek Nursery, with an...Ch. 12 - Prob. 12.8EXCh. 12 - Entries for cash dividends The declaration,...Ch. 12 - Prob. 12.10EXCh. 12 - Prob. 12.11EXCh. 12 - Effect of cash dividend and stock split Indicate...Ch. 12 - Selected dividend transactions, stock split...Ch. 12 - Treasury stock transactions Mystic Lake Inc....Ch. 12 - Prob. 12.15EXCh. 12 - Prob. 12.16EXCh. 12 - Reporting paid-in capital The following accounts...Ch. 12 - Stockholders Equity section of balance sheet The...Ch. 12 - Stockholders Equity section of balance sheet...Ch. 12 - Retained earnings statement Sumter Pumps...Ch. 12 - Prob. 12.21EXCh. 12 - Prob. 12.22EXCh. 12 - Dividends on preferred and common stock Pecan...Ch. 12 - Stock transactions for corporate expansion On...Ch. 12 - Selected stock transactions The following selected...Ch. 12 - Entries for selected corporate transactions Morrow...Ch. 12 - Entries for selected corporate transactions...Ch. 12 - Dividends on preferred and common stock Yosemite...Ch. 12 - Stock transaction for corporate expansion Pulsar...Ch. 12 - Selected stock transactions Diamondback Welding ...Ch. 12 - Entries for selected corporate transactions Nav-Go...Ch. 12 - Prob. 12.5BPRCh. 12 - Selected transactions completed by Equinox...Ch. 12 - Prob. 1ADMCh. 12 - Pacific Gas and Electric: Earnings per share...Ch. 12 - Caterpillar: Earnings per share Caterpillar Inc....Ch. 12 - BBT and Regions Financial: Earnings per share BBT...Ch. 12 - Ethics In Action Tommy Gunn is a division manager...Ch. 12 - Prob. 12.3TIF
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- Prepare the stockholders equity section of the balance sheet based on the following account balances: Common stock, 2 par, 60,000 shares 120,000 Preferred stock, 10 par, 5%, 4,000 shares 40,000 Common stock subscribed, 2 par, 3,000 shares 6,000 Retained earnings 17,000 The answers to the Self-Study Test Questions are at the end of the chapter (pages 811812).arrow_forwardSTATED VALUE, COMMON AND PREFERRED STOCK, AND NONCASH ASSETS Dans Hobby Stores had the following stock transactions during the year: (a) Issued 5,000 shares of no-par common stock with a stated value of 10 per share for 50,000 cash. (b) Issued 6,000 shares of no-par common stock with a stated value of 10 per share for 63,000 cash. (c) Issued 3,500 shares of no-par, 6% preferred stock with a stated value of 22 per share for 77,000 cash. (d) Issued 10,000 shares of 10 par common stock for land with a fair market value of 100,000. (e) Issued 11,000 shares of 10 par common stock with an 11 fair market value for a building with an uncertain fair market value. (f) Issued 8,000 shares of 30 par, 6% preferred stock for land with a fair market value of 243,000. REQUIRED Prepare general journal entries for these transactions, identifying each by letter.arrow_forwardSTOCKHOLDERS EQUITY SECTION After closing its books on December 31, Mel Brothers stockholders equity accounts have the following balances: Common stock subscriptions receivable 6,000 Common stock, 6 par, 15,000 shares 90,000 Preferred stock, 10 par, 8%, 10,000 shares 100,000 Common stock subscribed, 6 par, 5,000 shares 30,000 Retained earnings 50,000 Prepare the stockholders equity section of the balance sheet.arrow_forward
- STATED VALUE, COMMON AND PREFERRED STOCK, AND NONCASH ASSETS Kris Kraft Stores had the following stock transactions during the year: (a) Issued 8,000 shares of no-par common stock with a stated value of 5 per share for 40,000 cash. (b) Issued 6,000 shares of no-par common stock with a stated value of 5 per share for 33,000 cash. (c) Issued 5,000 shares of no-par, 6% preferred stock with a stated value of 15 per share for 75,000 cash. (d) Issued 10,000 shares of 5 par common stock for land with a fair market value of 50,000. (e) Issued 20,000 shares of 5 par common stock with a 7 fair market value for a building with an uncertain fair market value. (f) Issued 8,000 shares of 50 par, 8% preferred stock for land with a fair market value of 405,000. REQUIRED Prepare general journal entries for these transactions, identifying each by letter.arrow_forwardTreasury Stock, Cost Method Bush-Caine Company reported the following data on its December 31, 2018, balance sheet: The following transactions were reported by the company during 2019: 1. Reacquired 200 shares of its preferred stock at 57 per share. 2. Reacquired 500 shares of its common stock at 16 per share. 3. Sold 100 shares of preferred treasury stock at 58 per share. 4. Sold 200 shares of common treasury stock at 17 per share. 5. Sold 100 shares of common treasury stock at 9 per share. 6. Retired the shares of common stock remaining in the treasury. The company maintains separate treasury stock accounts and related additional paid-in capital accounts for each class of stock. Required: 1. Prepare the journal entries required to record the treasury stock transactions using the cost method. 2. Assuming the company earned a net income in 2019 of 30.000 and declared and paid dividends of 10,000, prepare the shareholders equity section of its balance sheet at December 31, 2019.arrow_forwardStockholders' Equity Section of Balance Sheet The following Stockholders' Equity section of the balance sheet prepared as of the end of the current year contains errors. Stockholders’ Equity Paid-in capital: Preferred 2% stock, $80 par (125,000 shares authorized and issued) $10,000,000 Excess of issue price over par 500,000 Paid-in capital, preferred stock $10,500,000 Retained earnings 96,700,000 Treasury stock (75,000 shares at cost) 1,755,000 Dividends payable 430,000 Total paid-in capital $109,385,000 Common stock, $20 par (1,000,000 shares authorized, 825,000 shares issued) 17,655,000 Organizing costs 300,000 Total stockholders' equity $127,340,000 Prepare a corrected Stockholders' Equity section. Stockholders' Equity Paid-In Capital: $ $ $ Total paid in capital $ Total $ Total stockholders' equity $arrow_forward
- Statement of Stockholders' Equity The stockholders’ equity T accounts of I-Cards Inc. for the year ended December 31, 20Y9, are as follows. Common Stock Jan. 1 Balance 900,000 Apr. 14 Issued 13,200 shares 396,000 Dec. 31 Balance 1,296,000 Paid-In Capital in Excess of Par Jan. 1 Balance 144,000 Apr. 14 Issued 13,200 shares 92,400 Dec. 31 Balance 236,400 Treasury Stock Aug. 7 Purchased 2,200 shares 61,600 Retained Earnings Mar. 31 Dividend 23,000 Jan. 1 Balance 1,570,000 June. 30 Dividend 23,000 Dec. 31 Closing Sept. 30 Dividend 23,000 (Net income) 236,000 Dec. 31 Dividend 23,000 Dec. 31 Balance 1,714,000 Prepare a statement of stockholders’ equity for the year ended December 31, 20Y9. If an amount is zero or an entry is not required, leave the box blank.arrow_forwardStockholders' Equity Section of Balance Sheet The following Stockholders’ Equity section of the balance sheet prepared as of the end of the current year: Stockholders’ Equity Paid-in capital: Preferred 2% stock, $60 par (94,000 shares authorized and issued) $5,640,000 Excess of issue price over par 375,000 $6,015,000 Retained earnings 72,525,000 Treasury stock (56,000 shares at cost) 868,000 Dividends payable 323,000 Total paid-in capital $79,731,000 Common stock, $10 par (750,000 shares authorized, 619,000 shares issued) 6,623,000 Organizing costs 225,000 Total stockholders' equity $86,579,000 Prepare a corrected Stockholders' Equity section. Use the minus sign to indicate any values that are deducted on the statement. Stockholders' Equity Paid-In Capital: blank $- Select - blank - Select - blank blank blank $- Select - blank $- Select - blank - Select - blank blank blank - Select -…arrow_forwardStatement of Stockholders' Equity The stockholders’ equity T accounts of I-Cards Inc. for the fiscal year ended December 31, 20Y9, are as follows. COMMON STOCK Jan. 1 Balance 1,200,000 Apr. 14 Issued 18,600 shares 558,000 Dec. 31 Balance 1,758,000 PAID-IN CAPITAL IN EXCESS OF PAR Jan. 1 Balance 192,000 Apr. 14 Issued 18,600 shares 130,200 Dec. 31 Balance 322,200 TREASURY STOCK Aug. 7 Purchased 3,100 shares 86,800 RETAINED EARNINGS Mar. 31 Dividend 31,000 Jan. 1 Balance 2,090,000 June. 30 Dividend 31,000 Dec. 31 Closing Sept. 30 Dividend 31,000 (Net income) 314,000 Dec. 31 Dividend 31,000 Dec. 31 Balance 2,280,000 Prepare a statement of stockholders’ equity for the year ended December 31, 20Y9. If an amount box does not require an entry, leave it blank. Also, if an amount reduces Stockholders' Equity, then add "minus" sign. I-Cards Inc.Statement of Stockholders' EquityFor the Year Ended…arrow_forward
- Statement of Stockholders' Equity The stockholders’ equity T accounts of I-Cards Inc. for the fiscal year ended December 31, 20Y9, are as follows. COMMON STOCK Jan. 1 Balance 1,500,000 Apr. 14 Issued 17,400 shares 696,000 Dec. 31 Balance 2,196,000 PAID-IN CAPITAL IN EXCESS OF PAR Jan. 1 Balance 240,000 Apr. 14 Issued 17,400 shares 139,200 Dec. 31 Balance 379,200 TREASURY STOCK Aug. 7 Purchased 2,900 shares 107,300 RETAINED EARNINGS Mar. 31 Dividend 38,000 Jan. 1 Balance 2,610,000 June. 30 Dividend 38,000 Dec. 31 Closing Sept. 30 Dividend 38,000 (Net income) 392,000 Dec. 31 Dividend 38,000 Dec. 31 Balance 2,850,000 Prepare a statement of stockholders’ equity for the year ended December 31, 20Y9. If an amount is zero or an entry is not required, leave the box blank. Also, if an amount reduces Stockholders' Equity, then add "minus" sign. I-Cards Inc. Statement of Stockholders' Equity For…arrow_forwardStatement of Stockholders' Equity The stockholders' equity T accounts of I-Cards Inc. for the fiscal year ended December 31, 20Y9, are as follows. COMMON STOCK Jan. 1 Balance 1,300,000 Apr. 14 Issued 11,400 570,000 shares Dec. 31 Balance 1,870,000 PAID-IN CAPITAL IN EXCESS OF PAR Jan. 1 Balance 208,000 Apr. 14 Issued 11,400 136,800 shares Dec. 31 Balance 344,800 TREASURY STOCK Aug. 7 Purchased 1,900 shares 91,200 RETAINED EARNINGS Mar. 31 Dividend 33,000 Jan. 1 Balance 2,260,000 June. 30 Dividend 33,000 Dec. 31 Closing Sept. 30 Dividend 33,000 (Net income) 339,000 Dec. 31 Dividend 33,000 Dec. 31 Balance 2,467,000 Prepare a statement of stockholders' equity for the year ended December 31, 20Y9. If an amount box does not require an entry I-Cards Inc. Statement of Stockholders' Equity For the Year Ended December 31, 20Y9arrow_forwardThe stockholders' equity T accounts of I-Cards Inc. for the fiscal year ended December 31, 20Y9, are as follows. Prepare a statement of stockholders' equity for the year ended December 31, 20Y9. COMMON STOCK Jan. 1 Balance 4,800,000 Apr. 14 Issued 30,000 shares 1,200,000 6,000,000 Dec. 31 Balance PAID-IN CAPITAL IN EXCESS OF PAR Jan. 1 Balance 960,000 Apr. 14 Issued 30,000 shares 300,000 Dec. 31 Balance 1,260,000 TREASURY STOCK Aug. 7 Purchased 12,000 shares 552,000 RETAINED EARNINGS Dividend Jan. 1 Balance Mar. 31 69,000 11,375,000 Dividend Closing (net income) June 30 69,000 Dec. 31 Sept. 30 Dividend 69,000 3,780,000 Dec. 31 Dec. 31 Dividend Balance 69,000 14,879,000arrow_forward
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