Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The stockholders' equity of Kinney Company at December 31, 2013, is shown below. 5% preferred stock, $100 par value, 10,000 shares authorized; 5,000 shares issued

The stockholders' equity of Kinney Company at December 31, 2013, is shown below.

5% preferred stock, $100 par value, 10,000 shares authorized; 5,000 shares issued and outstanding

$500,000

Common stock, $5 par value, 200,000 shares authorized; 60,000 shares issued and outstanding

300,000

Paid-in capital in excess of par valuepreferred stock

40,000

Paid-in capital in excess of par valuecommon stock

300,000

Retained earnings

656,000

Total stockholders' equity

$1,796,000

The following transactions, among others, occurred during 2014: Apr. 1 Declared and issued a 100% stock dividend on all outstanding shares of common stock. The market value of the stock was $11 per share. Dec. 7 Declared and issued a 4% stock dividend on all outstanding shares of common stock. The market value of the stock was $14 per share. Dec. 20 Declared and paid (1) the annual cash dividend on the preferred stock and (2) a cash dividend of 80 cents per common share. (a) Use the financial statement effects template to indicate the effects of these separate transactions.

image text in transcribed

(b) Compute retained earnings for 2014 assuming that the company reports 2014 net income of $262,000.

Balance Sheet Noncashh Contributed Transaction Cash Asset Assets Liabilities CapitalEarned Capital Apr. 1 0 300,000 (300,000) Dec. 7 0 33,600 (33,600) Dec. 20 (159,920) 0 0 (159,920)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing Diversity In Library Collections

Authors: Rosalind Washington, Sarah Voels

1st Edition

1440878749, 978-1440878749

More Books

Students also viewed these Accounting questions

Question

Explain the factors that determine the degree of decentralisation

Answered: 1 week ago

Question

What Is acidity?

Answered: 1 week ago

Question

Explain the principles of delegation

Answered: 1 week ago

Question

State the importance of motivation

Answered: 1 week ago

Question

Discuss the various steps involved in the process of planning

Answered: 1 week ago