On January 1, Year 7, Knox Company showed the following alphabetical list of shareholders’ equity items: Additional paid-in capital on common stock $130,000 Additional paid-in capital on preferred stock 6,000 Common stock, $10 par 100,000 Preferred stock, $100 par 50,000 Retained earnings 224,000 Accumulated other comprehensive income 9,000 During the year, the following events occurred and were properly recorded by the company: Knox issued 2,000 shares of common stock for $25 per share. Knox issued 110 shares of preferred stock for $116 per share. Knox reacquired 400 shares of its common stock as treasury stock at a cost of $26 per share. (Hint: Record the reacquisition cost in a Treasury Stock account.) Knox earned net income of $57,000. Knox paid a $7 per share dividend on the preferred stock and a $1.25 per share dividend on the common stock outstanding at the end of the year (treasury stock is not entitled to dividends). Required: Prepare a statement of shareholders' equity for Year 7, including retained earnings.
On January 1, Year 7, Knox Company showed the following alphabetical list of shareholders’ equity items: Additional paid-in capital on common stock $130,000 Additional paid-in capital on preferred stock 6,000 Common stock, $10 par 100,000 Preferred stock, $100 par 50,000 Retained earnings 224,000 Accumulated other comprehensive income 9,000 During the year, the following events occurred and were properly recorded by the company: Knox issued 2,000 shares of common stock for $25 per share. Knox issued 110 shares of preferred stock for $116 per share. Knox reacquired 400 shares of its common stock as treasury stock at a cost of $26 per share. (Hint: Record the reacquisition cost in a Treasury Stock account.) Knox earned net income of $57,000. Knox paid a $7 per share dividend on the preferred stock and a $1.25 per share dividend on the common stock outstanding at the end of the year (treasury stock is not entitled to dividends). Required: Prepare a statement of shareholders' equity for Year 7, including retained earnings.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
On January 1, Year 7, Knox Company showed the following alphabetical list of shareholders’ equity items:
| Additional paid-in capital on common stock | $130,000 |
| Additional paid-in capital on |
6,000 |
| Common stock, $10 par | 100,000 |
| Preferred stock, $100 par | 50,000 |
| 224,000 | |
| Accumulated other comprehensive income | 9,000 |
During the year, the following events occurred and were properly recorded by the company:
- Knox issued 2,000 shares of common stock for $25 per share.
- Knox issued 110 shares of preferred stock for $116 per share.
- Knox reacquired 400 shares of its common stock as
treasury stock at a cost of $26 per share. (Hint: Record the reacquisition cost in a Treasury Stock account.) - Knox earned net income of $57,000.
- Knox paid a $7 per share dividend on the preferred stock and a $1.25 per share dividend on the common stock outstanding at the end of the year (treasury stock is not entitled to dividends).
Required:
Prepare a statement of shareholders' equity for Year 7, including retained earnings.
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