The following information pertains to Books & Calendars, Inc.: a. Contributed capital on November 1, 2009, consisted
Question:
The following information pertains to Books & Calendars, Inc.:
a. Contributed capital on November 1, 2009, consisted of 75,000 issued and outstanding shares of common stock with par value of $2; additional paid-in capital in excess of par of $375,000; and retained earnings of $525,000.
b. During the first quarter of the fiscal year, Books & Calendars issued an additional 10,000 shares of common stock for $6 per share.
c. On April 15, the company declared a 2-for-1 stock split.
d. On May 31, the company declared and distributed a 10% stock dividend. The market price of the stock on that date was $8 per share.
e. On June 30, the company declared a dividend of $0.25 per share to be paid on July 15.
f. During October 2010, Books & Calendars’ CEO decided the company should buy 2,000 shares of its own stock. At that time, the stock was trading for $9 per share.
g. Net income for the year ended October 31, 2010, was $67,500.
Requirements
1. Show each of the transactions in the accounting equation.
2. Prepare the shareholders’ equity section of the balance sheet at October 31, 2010.
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...
Step by Step Answer:
1 2 a Total Assets Total Liabilities b 60000 Cash Shareholders ...View the full answer
Financial Accounting: A Business Process Approach
ISBN: 978-0136115274
3rd edition
Authors: Jane L. Reimers
