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Prepare the statement of stockholders' equity for Power Drive Corporation for the year ended

Prepare the statement of stockholders' equity for Power Drive Corporation for the year ended

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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**Power Drive Corporation - Changes in Stockholders’ Equity for 2021** **Overview:** Power Drive Corporation, a manufacturer of golf equipment and apparel, started 2021 with 100,000 shares of common stock. Throughout the year, various transactions affected its stockholders' equity. **Key Transactions:** - **March 1:** Issued 56,000 additional shares at $53 per share. - **May 10:** Purchased 5,100 shares of treasury stock at $56 per share. - **June 1:** Declared a cash dividend of $1.55 per share to be paid to stockholders (not applicable to treasury stock). - **July 1:** Paid the declared dividend. - **October 21:** Resold 2,550 shares of treasury stock purchased in May for $61 per share. **Beginning Balances (January 1, 2021):** - Common Stock: $100,000 - Additional Paid-in Capital: $4,600,000 - Retained Earnings: $2,100,000 - Net Income for 2021: $610,000 **Statement of Stockholders' Equity (December 31, 2021):** This statement is structured as follows: - **Columns:** 1. Common Stock 2. Additional Paid-in Capital 3. Retained Earnings 4. Treasury Stock 5. Total Stockholders’ Equity - **Transactions and Effects:** - **Issue Common Stock:** Adjusts Common Stock and Additional Paid-in Capital. - **Purchase Treasury Stock:** Decreases Treasury Stock. - **Declare Dividends:** Affects Retained Earnings. - **Resell Treasury Stock:** Adjusts Treasury Stock. - **Net Income Addition:** Increases Retained Earnings. **Financial Data:** As of December 31, 2021: - The common stock balance remains at $100,000. - Additional paid-in capital stands at $4,600,000. - Retained earnings are at $2,100,000. - Total stockholders’ equity is $6,800,000. The table included in the statement visually summarizes these transactions, showing how each affected the corporation's overall equity by the year's end.
Transcribed Image Text:**Power Drive Corporation - Changes in Stockholders’ Equity for 2021** **Overview:** Power Drive Corporation, a manufacturer of golf equipment and apparel, started 2021 with 100,000 shares of common stock. Throughout the year, various transactions affected its stockholders' equity. **Key Transactions:** - **March 1:** Issued 56,000 additional shares at $53 per share. - **May 10:** Purchased 5,100 shares of treasury stock at $56 per share. - **June 1:** Declared a cash dividend of $1.55 per share to be paid to stockholders (not applicable to treasury stock). - **July 1:** Paid the declared dividend. - **October 21:** Resold 2,550 shares of treasury stock purchased in May for $61 per share. **Beginning Balances (January 1, 2021):** - Common Stock: $100,000 - Additional Paid-in Capital: $4,600,000 - Retained Earnings: $2,100,000 - Net Income for 2021: $610,000 **Statement of Stockholders' Equity (December 31, 2021):** This statement is structured as follows: - **Columns:** 1. Common Stock 2. Additional Paid-in Capital 3. Retained Earnings 4. Treasury Stock 5. Total Stockholders’ Equity - **Transactions and Effects:** - **Issue Common Stock:** Adjusts Common Stock and Additional Paid-in Capital. - **Purchase Treasury Stock:** Decreases Treasury Stock. - **Declare Dividends:** Affects Retained Earnings. - **Resell Treasury Stock:** Adjusts Treasury Stock. - **Net Income Addition:** Increases Retained Earnings. **Financial Data:** As of December 31, 2021: - The common stock balance remains at $100,000. - Additional paid-in capital stands at $4,600,000. - Retained earnings are at $2,100,000. - Total stockholders’ equity is $6,800,000. The table included in the statement visually summarizes these transactions, showing how each affected the corporation's overall equity by the year's end.
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