Question
The shareholders equity accounts of Tsui, Inc. at December 31, 2013 are as follows: Preferred shares, $3 noncumulative, unlimited number authorized, 4000 issued $400,000 Common
The shareholders equity accounts of Tsui, Inc. at December 31, 2013 are as follows:
Preferred shares, $3 noncumulative, unlimited number authorized, 4000 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 overstatement of ending inventory from 2013 (Prior Period Error)
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 Reacquired 20,000 of the common shares at $4 per share.
Dec. 1 Declared a 10% stock dividend to common shareholders of record at Dec. 20, distributable on Jan. 12. The fair value of the common shares was $12.
Dec 18 Declared the annual cash dividend ($1.50 PS now post-split) to the preferred shareholders of record on Jan. 10, 2015, payable on Jan. 31, 2015
Dec 31 Determined that for 2014, profit before income tax was $350,000 and other comprehensive income from a gain in equity investments of $100,000, net of income tax expense of $35,000, was $65,000.
Requirements
1. Record the entries given and any related closing entries.
2. Create a Statement of Comprehensive Income
3. Create a Statement of Changes in Shareholders Equity
4. Create the Equity Section of the Balance Sheet (Statement of Financial Position)
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