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: Common stock $20,000,000 Additional paid-in capital on common stock 7,500,000 Retained earnings 6,470,000 Transactions during 2019 and other information relating to the shareholders' equity accounts were as follows: On January 5, 2019, Oakwood issued at $54 per share, 100,000 shares of $50 par value, 9%, cumulative convertible preferred stock. Each share of preferred stock is convertible, at the option of the holder, into 2 shares of common stock. Oakwood had 600,000 authorized shares of preferred stock. 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 treasury stock. On April 27, 2019, Oakwood sold 500,000 shares (previously unissued) of $10 par value common stock to the public at $17 per share. On June 18, 2019, Oakwood declared a cash dividend of $1 per share of common stock, payable on July 13, 2019, to shareholders of record on July 2, 2019. On November 9, 2019, Oakwood sold 10,000 shares of treasury stock for $21 per share. On December 14, 2019, Oakwood declared the yearly cash dividend on preferred stock, payable on January 14, 2020, to shareholders of record on December 31, 2019. 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. After correcting the beginning inventory, net income for 2019 was $4,500,000. Required: Question Content Area 1. Prepare a statement of retained earnings for Oakwood for the year ended December 31, 2019. Assume that only single-period financial statements for 2019 are presented. OAKWOOD, INC.Statement of Retained EarningsFor the Year Ended December 31, 2019 Balance, December 31, 2018, as originally reported $fill in the blank 6984aa03902e041_1 $Add: Prior period adjustment from error understating inventories at December 31, 2018 Less: Income tax effect Less: Income tax effect As restated $fill in the blank 6984aa03902e041_7 Add: Net income $fill in the blank 6984aa03902e041_10 Deduct cash dividends: $Less: Cash dividends on preferred stock Less: Cash dividends on common stock Less: Cash dividends on common stock Balance, December 31, 2019

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: Common stock $20,000,000 Additional paid-in capital on common stock 7,500,000 Retained earnings 6,470,000 Transactions during 2019 and other information relating to the shareholders' equity accounts were as follows: On January 5, 2019, Oakwood issued at $54 per share, 100,000 shares of $50 par value, 9%, cumulative convertible preferred stock. Each share of preferred stock is convertible, at the option of the holder, into 2 shares of common stock. Oakwood had 600,000 authorized shares of preferred stock. 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 treasury stock. On April 27, 2019, Oakwood sold 500,000 shares (previously unissued) of $10 par value common stock to the public at $17 per share. On June 18, 2019, Oakwood declared a cash dividend of $1 per share of common stock, payable on July 13, 2019, to shareholders of record on July 2, 2019. On November 9, 2019, Oakwood sold 10,000 shares of treasury stock for $21 per share. On December 14, 2019, Oakwood declared the yearly cash dividend on preferred stock, payable on January 14, 2020, to shareholders of record on December 31, 2019. 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. After correcting the beginning inventory, net income for 2019 was $4,500,000. Required: Question Content Area 1. Prepare a statement of retained earnings for Oakwood for the year ended December 31, 2019. Assume that only single-period financial statements for 2019 are presented. OAKWOOD, INC.Statement of Retained EarningsFor the Year Ended December 31, 2019 Balance, December 31, 2018, as originally reported $fill in the blank 6984aa03902e041_1 $Add: Prior period adjustment from error understating inventories at December 31, 2018 Less: Income tax effect Less: Income tax effect As restated $fill in the blank 6984aa03902e041_7 Add: Net income $fill in the blank 6984aa03902e041_10 Deduct cash dividends: $Less: Cash dividends on preferred stock Less: Cash dividends on common stock Less: Cash dividends on common stock Balance, December 31, 2019

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question Content Area

1. Prepare a statement of retained earnings for Oakwood for the year ended December 31, 2019. Assume that only single-period financial statements for 2019 are presented.

OAKWOOD, INC.Statement of Retained EarningsFor the Year Ended December 31, 2019

Balance, December 31, 2018, as originally reported		$fill in the blank 6984aa03902e041_1
	$Add: Prior period adjustment from error understating inventories at December 31, 2018
	Less: Income tax effect	Less: Income tax effect
As restated		$fill in the blank 6984aa03902e041_7
		Add: Net income
		$fill in the blank 6984aa03902e041_10
Deduct cash dividends:
	$Less: Cash dividends on preferred stock
	Less: Cash dividends on common stock	Less: Cash dividends on common stock
Balance, December 31, 2019		$fill in the blank 6984aa03902e041_16