Lima Corp. has the following stockholders equity information: Limas charter authorizes the company to issue 4,000 shares
Question:
Lima Corp. has the following stockholders’ equity information:
Lima’s charter authorizes the company to issue 4,000 shares of 11% preferred stock with par value of $200 and 700,000 shares of no-par common stock. The company issued 1,000 shares of the preferred stock at $200 per share. It issued 350,000 shares of the common stock for a total of $512,000. The company’s retained earnings balance at the beginning of 2018 was $75,000, and net income for the year was $100,000. During 2018, Lima declared the specified dividend on preferred and a $0.10 per-share dividend on common. Preferred dividends for 2017 were in arrears.
Requirement
1. Prepare the stockholders’ equity section of Lima Corp.’s balance sheet at December 31, 2018. Show the computation of all amounts. Journal entries are not required.
Common StockCommon stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...
Step by Step Answer:
Limas Corp Balance Sheet partial December 31 2018 Stockholders equity Preferred stock 11 20...View the full answer
Financial Accounting
ISBN: 978-0134725987
12th edition
Authors: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.
