Contributed Capital: Preferred stock, 6%, $100 par Additional paid-in capital on preferred stock Common stock, $5 par Additional paid-in capital on common stock Total contributed capital Retained earnings Accumulated other comprehensive income (loss): Unrealized decrease in value of available-for-sale securities Total contributed capital, retained earnings, and accumulated other comprehensive income Less: Treasury stock (1,000 shares of common stock at cost, acquired on 2/3/2018) Total Shareholders' Equity $200,000 12,000 $ 212,000 $150,000 240,000 390,000 $ 602,000 627,000 (41,000) $1,188,000 (20,000) $1,168,000 The company engaged in the following stock transactions during 2019: 4 Paid the semiannual dividend on the outstanding preferred stock and a $1.60 per share annual dividend on the outstanding common stock. These dividends had been declared on December 1, 2018. 5 Issued 500 shares of preferred stock at $110 per share. 22 Issued 4,000 shares of common stock at $23 per share. 2 Reissued 700 shares of treasury stock at $24 per share. Jan. Apr. May 14 Declared a 10% stock dividend on the outstanding common stock, payable on June 29. The common stock is currently selling for $25 per share. 4 Declared the semiannual cash dividend on the outstanding preferred stock, payable on July 5. 29 Issued the stock dividend declared on May 14. June 5 Paid the cash dividend declared on June 4. 20 Split the common stock 2-for-1 and reduced the par value to $2.50 per share. July Aug. 3 Declared a property dividend, payable to common shareholders on September 14. The dividend consists of an available-for-sale investment in 50 Robot Company bonds. The bonds had been acquired for $45,000, but have a carrying value of $30,000. The bonds are currently selling for $20,000. Sept. 14 Paid the property dividend declared on August 3. Dec. 3 Declared the semiannual cash dividend on the outstanding preferred stock and a $0.90 per share annual dividend on the outstanding common stock.
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
Included in the December 31, 2018, Jacobi Comapany
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