The stockholders’ equity section of Bramble Corp.’s balance sheet at December 31 is presented here. BRAMBLE CORP.Balance Sheet (partial) Stockholders’ equity Paid-in capital Preferred stock, cumulative, 12,500 shares authorized, 7,500 shares issued and outstanding $ 787,500 Common stock, no par, 735,000 shares authorized, 565,000 shares issued 2,260,000 Total paid-in capital 3,047,500 Retained earnings 1,158,000 Total paid-in capital and retained earnings 4,205,500 Less: Treasury stock (6,900 common shares) 36,800 Total stockholders’ equity $4,168,700 From a review of the stockholders’ equity section, answer the following questions.(a) How many shares of common stock are outstanding? Common stock outstanding enter a number of shares shares (b) Assuming there is a stated value, what is the stated value of the common stock? The stated value of the common stock $enter a common stock value per share in dollars per share (c) What is the par value of the preferred stock? The par value of the preferred stock $enter a preferred stock par value per share in dollars per share (d) If the annual dividend on preferred stock is $47,250, what is the dividend rate on preferred stock? The dividend rate enter a dividend rate on preferred stock in percentages % (e) If dividends of $73,800 were in arrears on preferred stock, what would be the balance reported for retained earnings? The Retained Earnings balance $enter a Retained Earnings balance in dollars
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
The
| BRAMBLE CORP. Balance Sheet (partial) |
|||
| Stockholders’ equity | |||
| Paid-in capital | |||
| |
$ 787,500
|
||
| Common stock, no par, 735,000 shares authorized, 565,000 shares issued |
2,260,000
|
||
| Total paid-in capital |
3,047,500
|
||
| |
1,158,000
|
||
| Total paid-in capital and retained earnings |
4,205,500
|
||
| Less: |
36,800
|
|
|
| Total stockholders’ equity |
$4,168,700
|
From a review of the stockholders’ equity section, answer the following questions.
(a) How many shares of common stock are outstanding?
| Common stock outstanding |
enter a number of shares
|
(b) Assuming there is a stated value, what is the stated value of the common stock?
| The stated value of the common stock |
$enter a common stock value per share in dollars
|
(c) What is the par value of the preferred stock?
| The par value of the preferred stock |
$enter a preferred stock par value per share in dollars
|
(d) If the annual dividend on preferred stock is $47,250, what is the
| The dividend rate |
enter a dividend rate on preferred stock in percentages
|
(e) If dividends of $73,800 were in arrears on preferred stock, what would be the balance reported for retained earnings?
| The Retained Earnings balance |
$enter a Retained Earnings balance in dollars
|
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