Maria Martinez organized Manhattan Transport Company in January 2015. The corporation immediately issued at $8 per share one- half of its 200,000 authorized shares of $2 par value common stock. On January 2, 2016, the corporation sold at par value the entire 5,000 authorized shares of 8 percent, $100 par value cumulative preferred stock. On January 2, 2017, the company again needed capital and issued 5,000 shares of an authorized 10,000 shares of no-par cumulative preferred stock for a total of $512,000. The no- par shares have a stated dividend of $9 per share. The company declared no dividends in 2015 and 2016. At the end of 2016, its retained earnings were $170,000. During 2017 and 2018 combined, the company earned a total of $890,000. Dividends of 50 cents per share in 2017 and $1.60 per share in 2018 were paid on the common stock. Required: Prepare the stockholders' equity section of the balance sheet at December 31, 2018. Include a supporting schedule showing your computation of retained earnings at the balance sheet date. (Hint: Income increases retained earnings, whereas dividends decrease retained earnings.)
Maria Martinez organized Manhattan Transport Company in January 2015. The corporation immediately issued at $8 per share one- half of its 200,000 authorized shares of $2 par value common stock. On January 2, 2016, the corporation sold at par value the entire 5,000 authorized shares of 8 percent, $100 par value cumulative preferred stock. On January 2, 2017, the company again needed capital and issued 5,000 shares of an authorized 10,000 shares of no-par cumulative preferred stock for a total of $512,000. The no- par shares have a stated dividend of $9 per share. The company declared no dividends in 2015 and 2016. At the end of 2016, its retained earnings were $170,000. During 2017 and 2018 combined, the company earned a total of $890,000. Dividends of 50 cents per share in 2017 and $1.60 per share in 2018 were paid on the common stock. Required: Prepare the stockholders' equity section of the balance sheet at December 31, 2018. Include a supporting schedule showing your computation of retained earnings at the balance sheet date. (Hint: Income increases retained earnings, whereas dividends decrease retained earnings.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
See attachtment
Transcribed Image Text:Maria Martinez organized Manhattan Transport Company in January 2015. The corporation immediately issued at $8 per share one-
half of its 200,000 authorized shares of $2 par value common stock. On January 2, 2016, the corporation sold at par value the entire
5,000 authorized shares of 8 percent, $100 par value cumulative preferred stock. On January 2, 2017, the company again needed
capital and issued 5,000 shares of an authorized 10,000 shares of no-par cumulative preferred stock for a total of $512,000. The no-
par shares have a stated dividend of $9 per share.
The company declared no dividends in 2015 and 2016. At the end of 2016, its retained earnings were $170,000. During 2017 and 2018
combined, the company earned a total of $890,000. Dividends of 50 cents per share in 2017 and $1.60 per share in 2018 were paid on
the common stock.
Required:
Prepare the stockholders' equity section of the balance sheet at December 31, 2018. Include a supporting schedule showing your
computation of retained earnings at the balance sheet date. (Hint: Income increases retained earnings, whereas dividends decrease
retained earnings.)
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education