Chapter 14, Problem 14.1AP

(a)

To determine

Dividend: The amount that shareholders receive in return of their investment is called as dividend. The distribution of net income of the Company to the shareholders in return of their investment is the dividend.

Stockholder’s Equity: Shareholder’s equity is also known as owner’s equity. It is a part of balance sheet other than assets and liabilities. It indicates the capital contributed by the owner of his business.

Partial Balance Sheet: All companies in order to identify the financial position prepare the balance sheet. The partial balance sheet is the extract of the balance sheet which is one of the important financial statements. It is prepared by showing assets and liabilities of the company in a statement together in the sequence of their liquidity.

To prepare: The journal entries and closing entries of net income and dividends.

(b)

To determine

To prepare: Standard form of stockholders’ equity accounts from the given journal entries.

(c)

To determine

The stockholders’ equity section of the balance sheet at December 31.