The stockholders' equity of DiFrancesco Company at March 31, 2019 is shown below. 496 preferred stock, $1,000 par value, 25,000 shares authorized; 10,000 shares issued and outstanding $10,000,000 Common stock, $1 par value, 3,000,000 shares authorized; 700,000 shares issued and outstanding 700,000 60,000 Additional paid-in capital-preferred stock Additional paid-in capital-common stock Retained earnings Total stockholders' equity The following transactions, among others, occurred during the fiscal year ended March 31, 2020. April 15, 2019 Declare and pay preferred dividends of $460,000. April 15, 2019 Declare and pay common dividends of $1.70 per share. October 1, 2019 Execute a 3-for-1 stock split of the common stock when the stock price was $161 per share. March 1, 2020 Declare and pay common dividends of $0.90 per share. (a) Use the financial statement effects template to indicate the effects of these separate transactions. Note: Use negative signs with answers, when appropriate. Balance Sheet Liabilities Transaction Apr. 15 Apr. 15 Oct. 1 Mar. 1 Cash Asset (460,000)✓ (1,190,000)✓ 0✓ 0x + Noncash Assets 0✓ 0✔ 0✓ 0✓ 0✔ 0✔ 0 ✓ 0✓ 17,150,000 56,356,542 $84,266,542 + Contributed Capital 0✓ 0✓ 0✔ 0✓ Earned Capital (460,000) ✔ (1,190,000)✓ 0✓ 0x Revenue 0✓ 0 ✓ 0✓ 0✔ Income Statement Expenses 460,000 x 0✔ 0✓ 0✓ Net Income (460,000) * 0✔ 0✔ 0 (b) At March 31, 2020, the company reported net income for the year of $8,900,610. Compute retained earnings as of March 31, 2020. $0 x
The stockholders' equity of DiFrancesco Company at March 31, 2019 is shown below. 496 preferred stock, $1,000 par value, 25,000 shares authorized; 10,000 shares issued and outstanding $10,000,000 Common stock, $1 par value, 3,000,000 shares authorized; 700,000 shares issued and outstanding 700,000 60,000 Additional paid-in capital-preferred stock Additional paid-in capital-common stock Retained earnings Total stockholders' equity The following transactions, among others, occurred during the fiscal year ended March 31, 2020. April 15, 2019 Declare and pay preferred dividends of $460,000. April 15, 2019 Declare and pay common dividends of $1.70 per share. October 1, 2019 Execute a 3-for-1 stock split of the common stock when the stock price was $161 per share. March 1, 2020 Declare and pay common dividends of $0.90 per share. (a) Use the financial statement effects template to indicate the effects of these separate transactions. Note: Use negative signs with answers, when appropriate. Balance Sheet Liabilities Transaction Apr. 15 Apr. 15 Oct. 1 Mar. 1 Cash Asset (460,000)✓ (1,190,000)✓ 0✓ 0x + Noncash Assets 0✓ 0✔ 0✓ 0✓ 0✔ 0✔ 0 ✓ 0✓ 17,150,000 56,356,542 $84,266,542 + Contributed Capital 0✓ 0✓ 0✔ 0✓ Earned Capital (460,000) ✔ (1,190,000)✓ 0✓ 0x Revenue 0✓ 0 ✓ 0✓ 0✔ Income Statement Expenses 460,000 x 0✔ 0✓ 0✓ Net Income (460,000) * 0✔ 0✔ 0 (b) At March 31, 2020, the company reported net income for the year of $8,900,610. Compute retained earnings as of March 31, 2020. $0 x
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:**Identifying and Analyzing Financial Statement Effects of Dividends**
The stockholders' equity of DiFrancesco Company at March 31, 2019, is shown below:
- **4% preferred stock, $1,000 par value, 25,000 shares authorized; 10,000 shares issued and outstanding:** $10,000,000
- **Common stock, $1 par value, 3,000,000 shares authorized; 700,000 shares issued and outstanding:** $700,000
- **Additional paid-in capital—preferred stock:** $60,000
- **Additional paid-in capital—common stock:** $17,150,000
- **Retained earnings:** $56,356,542
**Total stockholders' equity:** $84,266,542
The following transactions, among others, occurred during the fiscal year ended March 31, 2020:
- **April 15, 2019:** Declare and pay preferred dividends of $460,000.
- **April 15, 2019:** Declare and pay common dividends of $1.70 per share.
- **October 1, 2019:** Execute a 3-for-1 stock split of the common stock when the stock price was $161 per share.
- **March 1, 2020:** Declare and pay common dividends of $0.90 per share.
**Instructions:**
(a) Use the financial statement effects template to indicate the effects of these separate transactions. Note: Use negative signs with answers, where appropriate.
**Transaction Table:**
| Transaction | Cash Asset | Noncash Assets | Liabilities | Contributed Capital | Earned Capital | Revenue | Expenses | Net Income |
|-------------|------------|----------------|-------------|---------------------|----------------|---------|----------|------------|
| Apr. 15 | (460,000) | 0 | 0 | 0 | (460,000) | 0 | 460,000 | (460,000) |
| Apr. 15 | (1,190,000)| 0 | 0 | 0 | (1,190,000) | 0 | 0 | 0 |
| Oct. 1 | 0 | 0 | 0 | 0 | 0 | 0
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