Bacon Inc. has the following stockholders’ equity section in its May 31, 2019, comparative balance sheets: May 31, 2019April 30, 2019Paid-in capital: Preferred stock, $120 par value, 9%, cumulative, 200,000 shares authorized, 140,000 shares issued and outstanding$16,800,000 $16,800,000 Common stock, $5 par value, 1,000,000 shares authorized, 600,000 and 540,000 shares issued, respectively ? 2,700,000 Additional paid-in capital 26,100,000 23,220,000 Retained earnings 36,200,000 34,640,000 Less: Treasury common stock, at cost; 72,000 shares and 68,000 shares, respectively (4,412,000) (4,148,000)Total stockholders' equity$? $73,212,000 f-1. Assume that on June 1 the market value of the common stock was $70 per share and that the board of directors declared a 10% stock dividend on the issued shares of common stock. Use the horizontal model to show the issuance of the stock dividend. Indicate the financial statement effect. (Enter decreases with a minus sign to indicate a negative financial statement effect.)

The horizontal model is the one which is used to show the effect of each transaction on the…

Answered: Bacon Inc. has the following…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Bacon Inc. has the following stockholders’ equity section in its May 31, 2019, comparative balance sheets:

	May 31, 2019	April 30, 2019
Paid-in capital:
Preferred stock, $120 par value, 9%, cumulative, 200,000 shares authorized, 140,000 shares issued and outstanding	$	16,800,000		$	16,800,000
Common stock, $5 par value, 1,000,000 shares authorized, 600,000 and 540,000 shares issued, respectively		?			2,700,000
Additional paid-in capital		26,100,000			23,220,000
Retained earnings		36,200,000			34,640,000
Less: Treasury common stock, at cost; 72,000 shares and 68,000 shares, respectively		(4,412,000	)		(4,148,000	)
Total stockholders' equity	$	?		$	73,212,000

f-1. Assume that on June 1 the market value of the common stock was $70 per share and that the board of directors declared a 10% stock dividend on the issued shares of common stock. Use the horizontal model to show the issuance of the stock dividend. Indicate the financial statement effect. (Enter decreases with a minus sign to indicate a negative financial statement effect.)

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