Textbook Problem

Changes in Shareholders’ Equity The shareholders’ equity section of Flores Design Company’s December 31, 2018, balance sheet appeared as follows:

During 2019, the company entered into the following transactions affecting shareholders’ equity:

1. 1. Issued 250 shares of preferred stock at $164 per share.
2. 2. Issued 3,000 shares of common stock at $17 per share.
3. 3. Reacquired 200 of its own common shares as treasury stock for $15 per share.
4. 4. Reissued 250 shares of treasury stock at $17 per share (FIFO basis).
5. 5. Net income for 2016 was $46,500. Dividends of $25,000 were distributed.

Required:

1. 1. Prepare a statement of shareholders’ equity for the year ended December 31, 2019, for Flores.
2. 2. Compute the return on shareholders’ equity for 2019.