At the beginning of the year, Albers, Inc., has total stockholders' equity of $840,000 and 40,000 outstanding shares of a single class of capital stock. During the year, the corporation completes the following transactions affecting its stockholders' equity accounts: Jan. 10 A 5 percent stock dividend is declared and distributed. (Market price, $20 per share.) Mar. 15 The corporation acquires 2,000 shares of its own capital stock at a cost of $21.00 per share. May 30 All 2,000 shares of the treasury stock are reissued at a price of $31.50 per share. July 31 The capital stock is split 2-for-1. Dec. 15 The board of directors declares a cash dividend of $1.10 per share, payable on January 15. Dec. 31 Net income of $525,000 is reported for the year ended December 31. Instructions Compute the amount of total stockholders' equity, the number of shares of capital stock outstanding, and the book value per share following each successive transaction. Organize your solution as a three-column schedule with these separate column headings: (1) Total Stockholders' Equity, (2) Number of Shares Outstanding, and (3) Book Value per Share.
Miracle Tool, Inc., sells a single product (a combination screwdriver, pliers, hammer, and crescent wrench) exclusively through television advertising. The comparative income statements and balance sheets are for the past two years. Additional Information The following information regarding the company's operations in 2009 is available from the company's accounting records: 1.Early in the year the company declared and paid a $4,000 cash dividend. 2.During the year marketable securities costing $15,000 were sold for $14,000 cash, resulting in a $1,000 nonoperating loss. 3.The company purchased plant assets for $20,000, paying $2,000 in cash and issuing a note payable for the $18,000 balance. 4.During the year the company repaid a $10,000 note payable, but incurred an additional $18,000 in long-term debt as described in 3. 5.The owners invested $15,000 cash in the business as a condition of the new loans described in paragraph 4. MIRACLE TOOL, INC. Comparative Income Statement For the Years Ended December 31, 2008 and 2009 2008 $500,000 200,000 2009 $350,000 140,000 Gross profit on sales Less: Operating expenses (including depreciation of $34,000 in 2008 and $35,000 in 2009) Loss on sale of marketable securities $300,000 $210,000 260,000 243,000 -0 - 1,000 Net income (loss) $ 40,000 ($ 34,000) Sales Less: Cost of goods sold MIRACLE Tool, Inc. Comparative Balance Sheets December 31, 2008 2009 Assets Cash and cash equivalents Marketable securities Accounts receivable Inventories Plant and equipment (net of accumulated depreciation) Totals $10,000 20,000 40,000 120,000 300,000 $60,000 5,000 23,000 122,000 285,000 $490,000 $495,000 Liabilities & Stockholders' Equity Accounts payable Accrued expenses payable Note payable Capital stock Retained earnings $ 50,000 17,000 245,000 120,000 58,000 $490,000 Totals $ 73,000 14,000 253,000 135,000 20,000 $495,000 Instructions a. Prepare a worksheet for a statement of cash flows, following the general format illustrated in Exhibit 13-7. b.Prepare a formal statement of cash flows for 2009, including a supplementary schedule of noncash investing and financing activities. (Use the format illustrated in Exhibit 13-8. Cash provided by operating activities is to be presented by the indirect method.) (Amounts in parentheses do not require a minus sign in front of them. Omit the "$" sign in your response.) MIRACLE TOOL, INC. a.Worksheet for a Statement of Cash Flows For the Year Ended December 31, 2009 Balance sheet effects: Beginning Balance Assets Cash and cash equivalents Marketable securities Accounts receivable Inventory Plant and equipment (net of accumulated depreciation) Debit Changes 10,000 20,000 40,000 120,000 (x) 300,000 (9) Totals 50,000 17,000 245,000 120,000 58,000 Totals 490,000 Ending Balance (8) (4) (5) (3) 490,000 Liabilities & Owners' Equity Accounts payable Accrued expenses payable Notes payable Capital stock (no par value) Retained earnings Credit Changes 495,000 (6) (7) (10) (9) (11) (1) (2) 123,000 123,000 495,000 Cash effects: Operating activities: Net loss Depreciation expense Decrease in accounts receivable Increase in inventory Increase in accounts payable Decrease in accrued expenses payable Loss on sale of marketable securities Investing activities: Proceeds from sales of marketable securities Cash paid for plant assets Financing activities: Dividends paid Payment of note payable Issuance of capital stock Sources Subtotals Net increase in cash 105,000 55,000 (x) 105,000 105,000 Totals (1) (3) (4) (5) (6) (7) (8) (8) (9) (2) (10) (11) MIRACLE TOOL, INC. b. Statement of Cash Flows For the Year Ended December 31, 2009 Cash flows from operating activities: Net loss Add: Depreciation expense Decrease in accounts receivable Increase in accounts payable Loss on sales of marketable securities Subtotal Less: Increase in inventory Decrease in accrued expenses Net cash used in operating activities Uses $( ) $42,000 $ 5,000 $37,000 Cash flows from investing activities: Proceeds from sales of marketable securities Cash paid to acquire plant assets (see supplementary schedule) Net cash provided by investing activities Cash flows from financing activities: Dividends paid Payment of note payable Issuance of capital stock $ () $( ) () Net cash provided by financing activities Net increase (decrease) in cash Cash and cash equivalents, January 1, 2009 $ Cash and cash equivalents, Dec. 31, 2009 $ Supplementary Schedule: Noncash Investing and Financing Activities Purchases of plant assets Less: Portion financed through issuance of long-term debt Cash paid to acquire plant assets $ $ Miracle Tool, Inc., sells a single product (a combination screwdriver, pliers, hammer, and crescent wrench) exclusively through television advertising. The comparative income statements and balance sheets are for the past two years. Additional Information The following information regarding the company's operations in 2009 is available from the company's accounting records: 1.Early in the year the company declared and paid a $4,000 cash dividend. 2.During the year marketable securities costing $15,000 were sold for $14,000 cash, resulting in a $1,000 nonoperating loss. 3.The company purchased plant assets for $20,000, paying $2,000 in cash and issuing a note payable for the $18,000 balance. 4.During the year the company repaid a $10,000 note payable, but incurred an additional $18,000 in long-term debt as described in 3. 5.The owners invested $15,000 cash in the business as a condition of the new loans described in paragraph 4. MIRACLE TOOL, INC. Comparative Income Statement For the Years Ended December 31, 2008 and 2009 2008 $500,000 200,000 2009 $350,000 140,000 Gross profit on sales Less: Operating expenses (including depreciation of $34,000 in 2008 and $35,000 in 2009) Loss on sale of marketable securities $300,000 $210,000 260,000 243,000 -0 - 1,000 Net income (loss) $ 40,000 ($ 34,000) Sales Less: Cost of goods sold MIRACLE Tool, Inc. Comparative Balance Sheets December 31, 2008 2009 Assets Cash and cash equivalents Marketable securities Accounts receivable Inventories Plant and equipment (net of accumulated depreciation) Totals $10,000 20,000 40,000 120,000 300,000 $60,000 5,000 23,000 122,000 285,000 $490,000 $495,000 Liabilities & Stockholders' Equity Accounts payable Accrued expenses payable Note payable Capital stock Retained earnings $ 50,000 17,000 245,000 120,000 58,000 $490,000 Totals $ 73,000 14,000 253,000 135,000 20,000 $495,000 Instructions a. Prepare a worksheet for a statement of cash flows, following the general format illustrated in Exhibit 13-7. b.Prepare a formal statement of cash flows for 2009, including a supplementary schedule of noncash investing and financing activities. (Use the format illustrated in Exhibit 13-8. Cash provided by operating activities is to be presented by the indirect method.) (Amounts in parentheses do not require a minus sign in front of them. Omit the "$" sign in your response.) MIRACLE TOOL, INC. a.Worksheet for a Statement of Cash Flows For the Year Ended December 31, 2009 Balance sheet effects: Beginning Balance Assets Cash and cash equivalents Marketable securities Accounts receivable Inventory Plant and equipment (net of accumulated depreciation) Debit Changes 10,000 20,000 40,000 120,000 (x) 300,000 (9) Totals 50,000 17,000 245,000 120,000 58,000 Totals 490,000 Ending Balance (8) (4) (5) (3) 490,000 Liabilities & Owners' Equity Accounts payable Accrued expenses payable Notes payable Capital stock (no par value) Retained earnings Credit Changes 495,000 (6) (7) (10) (9) (11) (1) (2) 123,000 123,000 495,000 Cash effects: Operating activities: Net loss Depreciation expense Decrease in accounts receivable Increase in inventory Increase in accounts payable Decrease in accrued expenses payable Loss on sale of marketable securities Investing activities: Proceeds from sales of marketable securities Cash paid for plant assets Financing activities: Dividends paid Payment of note payable Issuance of capital stock Sources Subtotals Net increase in cash 105,000 55,000 (x) 105,000 105,000 Totals (1) (3) (4) (5) (6) (7) (8) (8) (9) (2) (10) (11) MIRACLE TOOL, INC. b. Statement of Cash Flows For the Year Ended December 31, 2009 Cash flows from operating activities: Net loss Add: Depreciation expense Decrease in accounts receivable Increase in accounts payable Loss on sales of marketable securities Subtotal Less: Increase in inventory Decrease in accrued expenses Net cash used in operating activities Uses $( ) $42,000 $ 5,000 $37,000 Cash flows from investing activities: Proceeds from sales of marketable securities Cash paid to acquire plant assets (see supplementary schedule) Net cash provided by investing activities Cash flows from financing activities: Dividends paid Payment of note payable Issuance of capital stock $ () $( ) () Net cash provided by financing activities Net increase (decrease) in cash Cash and cash equivalents, January 1, 2009 $ Cash and cash equivalents, Dec. 31, 2009 $ Supplementary Schedule: Noncash Investing and Financing Activities Purchases of plant assets Less: Portion financed through issuance of long-term debt Cash paid to acquire plant assets $ $ Miracle Tool, Inc., sells a single product (a combination screwdriver, pliers, hammer, and crescent wrench) exclusively through television advertising. The comparative income statements and balance sheets are for the past two years. Additional Information The following information regarding the company's operations in 2009 is available from the company's accounting records: 1.Early in the year the company declared and paid a $4,000 cash dividend. 2.During the year marketable securities costing $15,000 were sold for $14,000 cash, resulting in a $1,000 nonoperating loss. 3.The company purchased plant assets for $20,000, paying $2,000 in cash and issuing a note payable for the $18,000 balance. 4.During the year the company repaid a $10,000 note payable, but incurred an additional $18,000 in long-term debt as described in 3. 5.The owners invested $15,000 cash in the business as a condition of the new loans described in paragraph 4. MIRACLE TOOL, INC. Comparative Income Statement For the Years Ended December 31, 2008 and 2009 2008 $500,000 200,000 2009 $350,000 140,000 Gross profit on sales Less: Operating expenses (including depreciation of $34,000 in 2008 and $35,000 in 2009) Loss on sale of marketable securities $300,000 $210,000 260,000 243,000 -0 - 1,000 Net income (loss) $ 40,000 ($ 34,000) Sales Less: Cost of goods sold MIRACLE Tool, Inc. Comparative Balance Sheets December 31, 2008 2009 Assets Cash and cash equivalents Marketable securities Accounts receivable Inventories Plant and equipment (net of accumulated depreciation) Totals $10,000 20,000 40,000 120,000 300,000 $60,000 5,000 23,000 122,000 285,000 $490,000 $495,000 Liabilities & Stockholders' Equity Accounts payable Accrued expenses payable Note payable Capital stock Retained earnings $ 50,000 17,000 245,000 120,000 58,000 $490,000 Totals $ 73,000 14,000 253,000 135,000 20,000 $495,000 Instructions a. Prepare a worksheet for a statement of cash flows, following the general format illustrated in Exhibit 13-7. b.Prepare a formal statement of cash flows for 2009, including a supplementary schedule of noncash investing and financing activities. (Use the format illustrated in Exhibit 13-8. Cash provided by operating activities is to be presented by the indirect method.) (Amounts in parentheses do not require a minus sign in front of them. Omit the "$" sign in your response.) MIRACLE TOOL, INC. a.Worksheet for a Statement of Cash Flows For the Year Ended December 31, 2009 Balance sheet effects: Beginning Balance Assets Cash and cash equivalents Marketable securities Accounts receivable Inventory Plant and equipment (net of accumulated depreciation) Debit Changes 10,000 20,000 40,000 120,000 (x) 300,000 (9) Totals 50,000 17,000 245,000 120,000 58,000 Totals 490,000 Ending Balance (8) (4) (5) (3) 490,000 Liabilities & Owners' Equity Accounts payable Accrued expenses payable Notes payable Capital stock (no par value) Retained earnings Credit Changes 495,000 (6) (7) (10) (9) (11) (1) (2) 123,000 123,000 495,000 Cash effects: Operating activities: Net loss Depreciation expense Decrease in accounts receivable Increase in inventory Increase in accounts payable Decrease in accrued expenses payable Loss on sale of marketable securities Investing activities: Proceeds from sales of marketable securities Cash paid for plant assets Financing activities: Dividends paid Payment of note payable Issuance of capital stock Sources Subtotals Net increase in cash 105,000 55,000 (x) 105,000 105,000 Totals (1) (3) (4) (5) (6) (7) (8) (8) (9) (2) (10) (11) MIRACLE TOOL, INC. b. Statement of Cash Flows For the Year Ended December 31, 2009 Cash flows from operating activities: Net loss Add: Depreciation expense Decrease in accounts receivable Increase in accounts payable Loss on sales of marketable securities Subtotal Less: Increase in inventory Decrease in accrued expenses Net cash used in operating activities Uses $( ) $42,000 $ 5,000 $37,000 Cash flows from investing activities: Proceeds from sales of marketable securities Cash paid to acquire plant assets (see supplementary schedule) Net cash provided by investing activities Cash flows from financing activities: Dividends paid Payment of note payable Issuance of capital stock $ () $( ) () Net cash provided by financing activities Net increase (decrease) in cash Cash and cash equivalents, January 1, 2009 $ Cash and cash equivalents, Dec. 31, 2009 $ Supplementary Schedule: Noncash Investing and Financing Activities Purchases of plant assets Less: Portion financed through issuance of long-term debt Cash paid to acquire plant assets $ $ Miracle Tool, Inc., sells a single product (a combination screwdriver, pliers, hammer, and crescent wrench) exclusively through television advertising. The comparative income statements and balance sheets are for the past two years. Additional Information The following information regarding the company's operations in 2009 is available from the company's accounting records: 1.Early in the year the company declared and paid a $4,000 cash dividend. 2.During the year marketable securities costing $15,000 were sold for $14,000 cash, resulting in a $1,000 nonoperating loss. 3.The company purchased plant assets for $20,000, paying $2,000 in cash and issuing a note payable for the $18,000 balance. 4.During the year the company repaid a $10,000 note payable, but incurred an additional $18,000 in long-term debt as described in 3. 5.The owners invested $15,000 cash in the business as a condition of the new loans described in paragraph 4. MIRACLE TOOL, INC. Comparative Income Statement For the Years Ended December 31, 2008 and 2009 2008 $500,000 200,000 2009 $350,000 140,000 Gross profit on sales Less: Operating expenses (including depreciation of $34,000 in 2008 and $35,000 in 2009) Loss on sale of marketable securities $300,000 $210,000 260,000 243,000 -0 - 1,000 Net income (loss) $ 40,000 ($ 34,000) Sales Less: Cost of goods sold MIRACLE Tool, Inc. Comparative Balance Sheets December 31, 2008 2009 Assets Cash and cash equivalents Marketable securities Accounts receivable Inventories Plant and equipment (net of accumulated depreciation) Totals $10,000 20,000 40,000 120,000 300,000 $60,000 5,000 23,000 122,000 285,000 $490,000 $495,000 Liabilities & Stockholders' Equity Accounts payable Accrued expenses payable Note payable Capital stock Retained earnings $ 50,000 17,000 245,000 120,000 58,000 $490,000 Totals $ 73,000 14,000 253,000 135,000 20,000 $495,000 Instructions a. Prepare a worksheet for a statement of cash flows, following the general format illustrated in Exhibit 13-7. b.Prepare a formal statement of cash flows for 2009, including a supplementary schedule of noncash investing and financing activities. (Use the format illustrated in Exhibit 13-8. Cash provided by operating activities is to be presented by the indirect method.) (Amounts in parentheses do not require a minus sign in front of them. Omit the "$" sign in your response.) MIRACLE TOOL, INC. a.Worksheet for a Statement of Cash Flows For the Year Ended December 31, 2009 Balance sheet effects: Beginning Balance Assets Cash and cash equivalents Marketable securities Accounts receivable Inventory Plant and equipment (net of accumulated depreciation) Debit Changes 10,000 20,000 40,000 120,000 (x) 300,000 (9) Totals 50,000 17,000 245,000 120,000 58,000 Totals 490,000 Ending Balance (8) (4) (5) (3) 490,000 Liabilities & Owners' Equity Accounts payable Accrued expenses payable Notes payable Capital stock (no par value) Retained earnings Credit Changes 495,000 (6) (7) (10) (9) (11) (1) (2) 123,000 123,000 495,000 Cash effects: Operating activities: Net loss Depreciation expense Decrease in accounts receivable Increase in inventory Increase in accounts payable Decrease in accrued expenses payable Loss on sale of marketable securities Investing activities: Proceeds from sales of marketable securities Cash paid for plant assets Financing activities: Dividends paid Payment of note payable Issuance of capital stock Sources Subtotals Net increase in cash 105,000 55,000 (x) 105,000 105,000 Totals (1) (3) (4) (5) (6) (7) (8) (8) (9) (2) (10) (11) MIRACLE TOOL, INC. b. Statement of Cash Flows For the Year Ended December 31, 2009 Cash flows from operating activities: Net loss Add: Depreciation expense Decrease in accounts receivable Increase in accounts payable Loss on sales of marketable securities Subtotal Less: Increase in inventory Decrease in accrued expenses Net cash used in operating activities Uses $( ) $42,000 $ 5,000 $37,000 Cash flows from investing activities: Proceeds from sales of marketable securities Cash paid to acquire plant assets (see supplementary schedule) Net cash provided by investing activities Cash flows from financing activities: Dividends paid Payment of note payable Issuance of capital stock $ () $( ) () Net cash provided by financing activities Net increase (decrease) in cash Cash and cash equivalents, January 1, 2009 $ Cash and cash equivalents, Dec. 31, 2009 $ Supplementary Schedule: Noncash Investing and Financing Activities Purchases of plant assets Less: Portion financed through issuance of long-term debt Cash paid to acquire plant assets $ $ Miracle Tool, Inc., sells a single product (a combination screwdriver, pliers, hammer, and crescent wrench) exclusively through television advertising. The comparative income statements and balance sheets are for the past two years. Additional Information The following information regarding the company's operations in 2009 is available from the company's accounting records: 1.Early in the year the company declared and paid a $4,000 cash dividend. 2.During the year marketable securities costing $15,000 were sold for $14,000 cash, resulting in a $1,000 nonoperating loss. 3.The company purchased plant assets for $20,000, paying $2,000 in cash and issuing a note payable for the $18,000 balance. 4.During the year the company repaid a $10,000 note payable, but incurred an additional $18,000 in long-term debt as described in 3. 5.The owners invested $15,000 cash in the business as a condition of the new loans described in paragraph 4. MIRACLE TOOL, INC. Comparative Income Statement For the Years Ended December 31, 2008 and 2009 2008 $500,000 200,000 2009 $350,000 140,000 Gross profit on sales Less: Operating expenses (including depreciation of $34,000 in 2008 and $35,000 in 2009) Loss on sale of marketable securities $300,000 $210,000 260,000 243,000 -0 - 1,000 Net income (loss) $ 40,000 ($ 34,000) Sales Less: Cost of goods sold MIRACLE Tool, Inc. Comparative Balance Sheets December 31, 2008 2009 Assets Cash and cash equivalents Marketable securities Accounts receivable Inventories Plant and equipment (net of accumulated depreciation) Totals $10,000 20,000 40,000 120,000 300,000 $60,000 5,000 23,000 122,000 285,000 $490,000 $495,000 Liabilities & Stockholders' Equity Accounts payable Accrued expenses payable Note payable Capital stock Retained earnings $ 50,000 17,000 245,000 120,000 58,000 $490,000 Totals $ 73,000 14,000 253,000 135,000 20,000 $495,000 Instructions a. Prepare a worksheet for a statement of cash flows, following the general format illustrated in Exhibit 13-7. b.Prepare a formal statement of cash flows for 2009, including a supplementary schedule of noncash investing and financing activities. (Use the format illustrated in Exhibit 13-8. Cash provided by operating activities is to be presented by the indirect method.) (Amounts in parentheses do not require a minus sign in front of them. Omit the "$" sign in your response.) MIRACLE TOOL, INC. a.Worksheet for a Statement of Cash Flows For the Year Ended December 31, 2009 Balance sheet effects: Beginning Balance Assets Cash and cash equivalents Marketable securities Accounts receivable Inventory Plant and equipment (net of accumulated depreciation) Debit Changes 10,000 20,000 40,000 120,000 (x) 300,000 (9) Totals 50,000 17,000 245,000 120,000 58,000 Totals 490,000 Ending Balance (8) (4) (5) (3) 490,000 Liabilities & Owners' Equity Accounts payable Accrued expenses payable Notes payable Capital stock (no par value) Retained earnings Credit Changes 495,000 (6) (7) (10) (9) (11) (1) (2) 123,000 123,000 495,000 Cash effects: Operating activities: Net loss Depreciation expense Decrease in accounts receivable Increase in inventory Increase in accounts payable Decrease in accrued expenses payable Loss on sale of marketable securities Investing activities: Proceeds from sales of marketable securities Cash paid for plant assets Financing activities: Dividends paid Payment of note payable Issuance of capital stock Sources Subtotals Net increase in cash 105,000 55,000 (x) 105,000 105,000 Totals (1) (3) (4) (5) (6) (7) (8) (8) (9) (2) (10) (11) MIRACLE TOOL, INC. b. Statement of Cash Flows For the Year Ended December 31, 2009 Cash flows from operating activities: Net loss Add: Depreciation expense Decrease in accounts receivable Increase in accounts payable Loss on sales of marketable securities Subtotal Less: Increase in inventory Decrease in accrued expenses Net cash used in operating activities Uses $( ) $42,000 $ 5,000 $37,000 Cash flows from investing activities: Proceeds from sales of marketable securities Cash paid to acquire plant assets (see supplementary schedule) Net cash provided by investing activities Cash flows from financing activities: Dividends paid Payment of note payable Issuance of capital stock $ () $( ) () Net cash provided by financing activities Net increase (decrease) in cash Cash and cash equivalents, January 1, 2009 $ Cash and cash equivalents, Dec. 31, 2009 $ Supplementary Schedule: Noncash Investing and Financing Activities Purchases of plant assets Less: Portion financed through issuance of long-term debt Cash paid to acquire plant assets $ $
