$20,000,000 7,500,000 6,470,000 Common stock Additional paid-in capital on common stock Retained earnings
Oakwood Inc. is a public enterprise whose shares are traded in the over-the-counter market. At December 31, 2018, Oakwood had 6,000,000 authorized shares of $10 par value common stock, of which 2,000,000 shares were issued and outstanding. The shareholders’ equity accounts at December 31, 2018, had the following balances:
Transactions during 2019 and other information relating to the shareholders’ equity accounts were as follows:
1. On January 5, 2019, Oakwood issued at $54 per share, 100,000 shares of $50 par value, 9%, cumulative convertible
2. On February 2, 2019, Oakwood reacquired 20,000 shares of its common stock for $16 per share. Oakwood uses the cost method to account for
3. On April 27, 2019, Oakwood sold 500,000 shares (previously unissued) of $10 par value common stock to the public at $17 per share.
4. On June 18, 2019, Oakwood declared a cash dividend of $1 per share of common stock, payable on July 13, 2016, to shareholders of record on July 2, 2016.
5. On November 9, 2019, Oakwood sold 10,000 shares of treasury stock for $21 per share.
6. On December 14, 2019, Oakwood declared the yearly cash dividend on preferred stock, payable on January 14, 2017, to shareholders of record on December 31, 2019.
7. On January 18, 2020, before the books were closed for 2019, Oakwood became aware that the ending inventories at December 31, 2018, were understated by $300,000 (the after-tax effect on 2018 net income was $210,000). The appropriate correcting entry was recorded the same day.
8. After correcting the beginning inventory, net income for 2019 was $4,500,000.
Required:
1. Prepare a statement of
2. Prepare the shareholders’ equity section of Oakwood’s
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