Question
Splish Company was formed on July 1, 2018. It was authorized to issue 306,400 shares of $10 par value common stock and 101,400 shares of
Splish Company was formed on July 1, 2018. It was authorized to issue 306,400 shares of $10 par value common stock and 101,400 shares of 7% $25 par value, cumulative and nonparticipating preferred stock. Splish Company has a July 1June 30 fiscal year. The following information relates to the stockholders equity accounts of Splish Company. Common Stock Prior to the 20202021 fiscal year, Splish Company had 111,200 shares of outstanding common stock issued as follows.
1. | 81,900 shares were issued for cash on July 1, 2018, at $30 per share. | |
2. | On July 24, 2018, 5,000 shares were exchanged for a plot of land which cost the seller $68,100 in 2012 and had an estimated fair value of $220,900 on July 24, 2018. | |
3. | 24,300 shares were issued on March 1, 2019, for $41 per share. |
During the 20202021 fiscal year, the following transactions regarding common stock took place.
November 30, 2020 | Splish purchased 1,900 shares of its own stock on the open market at $37 per share. Splish uses the cost method for treasury stock. | |
December 15, 2020 | Splish declared a 5% stock dividend for stockholders of record on January 15, 2021, to be issued on January 31, 2021. Splish was having a liquidity problem and could not afford a cash dividend at the time. Splishs common stock was selling at $47 per share on December 15, 2020. | |
June 20, 2021 | Splish sold 540 shares of its own common stock that it had purchased on November 30, 2020, for $20,100. |
Preferred Stock Splish issued 43,600 shares of preferred stock at $48 per share on July 1, 2019. Cash Dividends Splish has followed a schedule of declaring cash dividends in December and June, with payment being made to stockholders of record in the following month. The cash dividends which have been declared since inception of the company through June 30, 2021, are shown below.
Declaration Date | Common Stock | Preferred Stock | ||
12/15/19 | $0.30 per share | $1 per share | ||
6/15/20 | $0.30 per share | $1 per share | ||
12/15/20 | $1 per share |
No cash dividends were declared during June 2021 due to the companys liquidity problems. Retained Earnings As of June 30, 2020, Splishs retained earnings account had a balance of $657,300. For the fiscal year ending June 30, 2021, Splish reported net income of $38,100. Prepare the stockholders equity section of the balance sheet, for Splish Company as of June 30, 2021, as it should appear in its annual report to the shareholders. (Enter account name only and do not provide descriptive information.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started