Take the transaction descriptions and if possible journalize into Debits and Credits and then use to prepare the current year Statement of Equity I have given you a head start on Transaction 1 but you need to complete the posting to the Statement of Equity. SUMMARY OF THE FIRST YEAR The Company went public last year by sing 100.000 shares of 54 Class Common Stock at a price of $20 per share In the last year, the company earned 5,000,000 and paid 3,000,000 in dividends. The company invested 1,500,000 of its Public Offering in Debt Securities with rising inflation those securities lost 200,000 in Fair Value This the only 9 10 11 NOTE Keep the number of shares held in 12 Treasury Column U separate from the number of Common 13 Shane recorded in Column 14 15 Transaction 1 16 17 In Year 2, the company ear$6,000,000 16 Transaction 2 19 Closing balances Year 1, Opening Balances Year 2 Prepare the entries Provide a Label for the SE Here. Taken from income statement Earnings. Current year No journal entries needed. 20 21 22 23 24 25 26 27 Transaction 3 The stock price rises from the POP of $20 to a new high of $30. The company decides to Transaction 4 Company finances the repurchase of Class A share te $300,000 of NO PAB Perred Stoc Transaction 5 29 in the second half of year 2, continuing uncertainty 30 31 32 33 34 35 36 37 38 39 40 41 43 about inflation and the actions of the FED cave sharp drop and the stock price goes up to 40 per har The company decides to cash by ling 44 Transaction 6 in the fourth quarter of the year the company suffers a set back when the US patent office reject new patent application. While earnings hold up for the year, the company's stock price sump to 5 and the company is unable to book new orders for year 3 t suffers a cash shortfall. As an insurance policy against insolvency during the upcoming year 3 the company decides to reset 3,000 cars at a price of 5 25 which means 2,000 shares will remainin Treasury Stock at the original Transactions 7, 8 and 9 Due to the fourth quarter disappointment from the US Patent Office, the company decides to postpone the dividend on the preferred stock With only 2,000 shares remaining in Treasury and Be sure to record three separate set of journal entires, as needed for the DECLARATION DATE RECORD DATE 45 46 47 48 49 50 51 52 18,000 Class A shares net outstanding the 53 Company decides to ive dividend of 54 Scents per share for a total amount of $45,000 55 The Declaration Date for the dividendis 12/1 The Record Date is 12/10 PAYMENT DATE 57 The payment date is 12/20 58 59 Transaction 10 60 Make Sure that the Column Totals 61 Calculate the Totals in Each column Add Across to TOTAL EQUITY!!!! 62 63 64 65 TOTALS Preferred Stock NO PAR shares Amou 000 any ne B 9 the only 10 12 13 Provide a Label 14 for the SE Here. 15 16 Earnings, Current year 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 TOTALS 62 63 64 65 66 67 68 Your Statement of Equity Preferred Stock NO PAR COMMON STOCK-CLASS A TREASURY STOCK Retained AOCI TOTAL These columns are PAR shares Amount shares 1 APIC 0100.000 400.000 1.600.000 Account T Stock shares Balance Earnings EQUITY reserved for comments APIC 0 2.000.000 200.000 3.800.000 A B D E F 1 2 3 Take the transaction descriptions and if 4 possible journalize into Debits and Credits 5 and then use to prepare the current year 6 Statement of Equity. 7 I have given you a head start on Transaction 1 8 but you need to complete the posting to 9 the Statement of Equity. 10 11 NOTE: Keep the number of shares held in 12 Treasury Column L) separate from the number of Common 13 Shares recorded in Column] 14 15 Transaction 1 16 In Year 2, the company earns $6,000,000 17 18 Transaction 2 19 The investment in Fixed Income securities 20 loses another 100,000 due to inflation. 21 Transaction 3 22 The stock price rises from the IPO Price of $20 23 to a new high of $30. The company decides to 24 buy back 10,000 at $30 for cash. They are held for resale. 25 Transaction 4 26 Company finances the repurchase of Class A shares 27 by issuing $300,000 of NO PAR Preferred Stock 28 Transaction 5 29 In the second half of year 2, continuing uncertainty 30 about inflation and the actions of the FED cause a sharp drop SUMMARY OF THE FIRST YEAR The Company went public last year by issuing 100,000 shares of $4 Par Class A Common Stock at a price of $20 per share. In the last year, the company earned 5,000,000 and paid 3,000,000 in dividends. The company invested 1,500,000 of its Initial Public Offering in Debt Securities. With rising inflation those securities lost 200,000 in Fair Value. This is the only Activity requiring an AOCI Account. As of year 1 there is no preferred Stock and no Noncontrolling Interests.. Closing balances Year 1, Opening Balances Year 2 Prepare the Journal entries in these columns Provide a Label for the SE Here. Taken from income statement. Earnings, Current year No journal entries needed. 143 COVER The Statement of Equity Ready Accessibility: Investigate T DI Ex fx B26 Format Painter Clipboard Font 5 > 129 Merge Alignment 28 Transaction 5 A 29 In the second half of year 2, continuing uncertainty 30 about inflation and the actions of the FED cause a sharp drop 31 in the market but the company's revenue is resilient 32 and the stock price goes up to $ 40 per share. 33 The company decides to raise cash by reselling 34 5,000 shares for cash at a price of $ 40. 35 Transaction 6 36 In the fourth quarter of the year the company 37 suffers a set back when the US patent office rejects 38 a new patent application. While earnings hold up 39 for the year, the company's stock price slumps to $ 25, 40 and the company is unable to book new orders for year 3. 41 It suffers a cash shortfall. As an insurance policy 42 against insolvency during the upcoming year 3, 43 the company decides to resell 3,000 shares at a price 44 of $ 25 which means 2,000 shares will remain in 45 Treasury Stock at the original or historic repurchase 46 price of $ 30. 47 Transactions 7, 8 and 9 48 Due to the fourth quarter disappointement from 49 the US Patent Office, the company decides to 50 postpone the dividend on the preferred stock. 51 With only 2,000 shares remainng in Treasury and 52 98,000 Class A shares net outstanding the 53 Company decides to issue a dividend of 54 5 cents per share for a total amount of $49,000. 55 The Declaration Date for the dividend is 12/1 56 The Record Date is 12/10. 57 The payment date is 12/20 58 En Tation 30 Ready COVER The Statement of Equity Accessibility: Investigate Type here to search B C Be sure to record three separate set of journal entires, as needed for the DECLARATION DATE RECORD DATE PAYMENT DATE O C