The stockholders equity section of Winslow Design Companys December 31, 2006 balance sheet appeared as follows: Contributed
Question:
The stockholders’ equity section of Winslow Design Company’s December 31, 2006 balance sheet appeared as follows:
Contributed capital
Preferred stock, $100 par (10,000 shares authorized, 1,250 shares issued) . $125,000
Additional paid-in capital on preferred stock .............. 55,000
Common stock, $10 par (60,000 shares authorized, 15,000 shares issued) ... 150,000
Additional paid-in capital on common stock .............. 105,000
Total contributed capital ...................... $435,000
Retained earnings ............................ 78,000
Contributed capital and retained earnings ............... $ 513,000
Less: Treasury stock (300 shares of common at $14 per share) ........ (4,200)
Total Stockholders’ Equity ..................... $508,800
During 2007 the company entered into the following transactions affecting stockholders’ equity:
1. Issued 250 shares of preferred stock at $164 per share.
2. Issued 3,000 shares of common stock at $17 per share.
3. Reacquired 200 of its own common shares as treasury stock for $15 per share.
4. Reissued 250 shares of treasury stock at $17 per share (FIFO basis).
5. Net income for 2007 was $46,500. Dividends of $25,000 were distributed.
Required
1. Prepare a statement of changes in stockholders’ equity for the year ended December 31, 2007.
2. Compute the return on stockholders’ equity for 2007.
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...
Step by Step Answer:
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones