The shareholders’ equity accounts of Tsui, Inc. at December 31, 2013, are as follows:

Preferred shares, $3 noncumulative, unlimited number 

authorized, 4,000 issued ..…………………………………………...........................………….. $400,000

Common shares, unlimited number authorized, 160,000 issued ………………..….. 800,000

Retained earnings …………………………………………...........................………………..………. 450,000

Accumulated other comprehensive loss …………………………………………................… (50,000)

Tsui has a 35% income tax rate. During the following fiscal year, ended December 31, 2014, the company had the following transactions and events:

Feb. 1 Discovered a $70,000 understatement of 2013 cost of goods sold.

July 12 Announced a 2-for-1 preferred stock split. The market price of the preferred shares at the date of announcement was $150.

Oct. 1 Adopted a new accounting policy that resulted in a cumulative decrease to prior years’ profit of $30,000 before income tax.

Dec. 1 Declared a 10% stock dividend to common shareholders of record at December 20, distributable on January 12. The fair value of the common shares was $12 per share.

18 Declared the annual cash dividend ($1.50 post-split) to the preferred shareholders of record on January 10, 2015, payable on January 31, 2015.

31 Determined that for 2014, profit before income tax was $350,000 and other comprehensive income, net of income tax expense of $35,000, was $65,000.

Instructions

Prepare a statement of changes in shareholders’ equity for the year ended December 31, 2014.

TAKING IT FURTHER

How does comprehensive income impact the share holders’ equity in the balance sheet? Is this the same for companies following ASPE?