Wholegrain Health Foods Inc. is authorized to issue 5,000,000 common shares. In its initial public offering during
Question:
Wholegrain Health Foods Inc. is authorized to issue 5,000,000 common shares. In its initial public offering during 2013, Wholegrain issued 500,000 common shares for $7.00 per share. Over the next year, Wholegrain's share price increased and the company issued 400,000 more shares at an average price of $8.50.
During the five years from 2013 through 2017, Wholegrain earned net income of $920,000 and declared and paid cash dividends of $140,000. A 10% stock dividend was declared and distributed to the shareholders in 2017 on the shares outstanding. The market price was $8.00 per share when the stock dividend was distributed. At December 31, 2017, the company has total assets of $14,500,000 and total liabilities of $6,820,000.
Requirement
Show the computation of Wholegrain's total shareholders' equity at December 31, 2017.
Present a detailed computation of each element of shareholders' equity?
DividendA 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...
Step by Step Answer:
Financial Accounting
ISBN: 978-0134564142
6th Canadian edition
Authors: Walter Jr. Harrison, Charles T. Horngren, C. William Thomas, Greg Berberich, Catherine Seguin