Identify and briefly describe the two primary sources of shareholders’ equity.

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Answer 1

Textbook Question

Chapter 18, Problem 18.1Q

Identify and briefly describe the two primary sources of shareholders’ equity.

Expert Solution & Answer

To determine

Shareholders’ equity: Shareholders’equity refers to the right the owner possesses over the resources of the business. In other words, Shareholders’equity refers to the amount of capital that includes the amount of investment by the stockholders, earnings generated from the normal business operations, and less any dividends paid to the stockholders.

To identify and briefly: Define the two primary sources of shareholders’ equity.

Explanation of Solution

The two primary sources of shareholders’ equity is:

1. Paid in capital
2. Retained earnings

Paid in capital:

Paid in capital represents the amount invested by the shareholders of the business in common stock and/or preferred stock.

Retained earnings:

Retained earnings are the portion of earnings kept by the business for the purpose of reinvestments, payment of debts, or for future growth.

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Question 1181 28 Current Attempt in Progress Here are comparative balance sheets for Migitsu Company. Prepare a statement of cash flows-indirect method. MIGITSU COMPANY Comparative Balance Sheets December 31 Assets 2020 2019 Cash $73,000 $22,000 Accounts receivable 87,000 76.000 Inventory 170,000 191.000 Land 72,000 100.000 Equipment 260,000 200.000 Accumulated depreciation - equipment (66,000) (32.000) Total $596,000 $557,000 Liabilities and Stockholders' Equity Accounts payable $37,000 $47.000 Bonds payable 150,000 210,000 Common stock ($1 par) 216.000 174,000 Retained earnings 193,000 126.000 Total $596,000 $557,000 Additional information: 1 Net income for 2020 was $100,000. N Cash dividends of $33,000 were declared and paid. 3. Bonds payable amounting to $60,000 were redeemed for cash $60,000. -18 4. Common stock was issued for $42,000 cash. 5. Equipment that cost $50,000 and had a book value of $30,000 was sold for $36,000 during 2020; land was sold at cost.

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Answer 2

Textbook Question

Chapter 18, Problem 18.1Q

Identify and briefly describe the two primary sources of shareholders’ equity.

Expert Solution & Answer

To determine

Shareholders’ equity: Shareholders’equity refers to the right the owner possesses over the resources of the business. In other words, Shareholders’equity refers to the amount of capital that includes the amount of investment by the stockholders, earnings generated from the normal business operations, and less any dividends paid to the stockholders.

To identify and briefly: Define the two primary sources of shareholders’ equity.

Explanation of Solution

The two primary sources of shareholders’ equity is:

1. Paid in capital
2. Retained earnings

Paid in capital:

Paid in capital represents the amount invested by the shareholders of the business in common stock and/or preferred stock.

Retained earnings:

Retained earnings are the portion of earnings kept by the business for the purpose of reinvestments, payment of debts, or for future growth.

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Answer 3

Textbook Question

Chapter 18, Problem 18.1Q

Identify and briefly describe the two primary sources of shareholders’ equity.

Expert Solution & Answer

To determine

Shareholders’ equity: Shareholders’equity refers to the right the owner possesses over the resources of the business. In other words, Shareholders’equity refers to the amount of capital that includes the amount of investment by the stockholders, earnings generated from the normal business operations, and less any dividends paid to the stockholders.

To identify and briefly: Define the two primary sources of shareholders’ equity.

Explanation of Solution

The two primary sources of shareholders’ equity is:

1. Paid in capital
2. Retained earnings

Paid in capital:

Paid in capital represents the amount invested by the shareholders of the business in common stock and/or preferred stock.

Retained earnings:

Retained earnings are the portion of earnings kept by the business for the purpose of reinvestments, payment of debts, or for future growth.

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Answer 4

Textbook Question

Chapter 18, Problem 18.1Q

Identify and briefly describe the two primary sources of shareholders’ equity.

Expert Solution & Answer

To determine

Shareholders’ equity: Shareholders’equity refers to the right the owner possesses over the resources of the business. In other words, Shareholders’equity refers to the amount of capital that includes the amount of investment by the stockholders, earnings generated from the normal business operations, and less any dividends paid to the stockholders.

To identify and briefly: Define the two primary sources of shareholders’ equity.

Explanation of Solution

The two primary sources of shareholders’ equity is:

1. Paid in capital
2. Retained earnings

Paid in capital:

Paid in capital represents the amount invested by the shareholders of the business in common stock and/or preferred stock.

Retained earnings:

Retained earnings are the portion of earnings kept by the business for the purpose of reinvestments, payment of debts, or for future growth.

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Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

To determine

Shareholders’ equity: Shareholders’equity refers to the right the owner possesses over the resources of the business. In other words, Shareholders’equity refers to the amount of capital that includes the amount of investment by the stockholders, earnings generated from the normal business operations, and less any dividends paid to the stockholders.

To identify and briefly: Define the two primary sources of shareholders’ equity.

Explanation of Solution

The two primary sources of shareholders’ equity is:

1. Paid in capital
2. Retained earnings

Paid in capital:

Paid in capital represents the amount invested by the shareholders of the business in common stock and/or preferred stock.

Retained earnings:

Retained earnings are the portion of earnings kept by the business for the purpose of reinvestments, payment of debts, or for future growth.

Answer 8

Expert Solution & Answer

To determine

Shareholders’ equity: Shareholders’equity refers to the right the owner possesses over the resources of the business. In other words, Shareholders’equity refers to the amount of capital that includes the amount of investment by the stockholders, earnings generated from the normal business operations, and less any dividends paid to the stockholders.

To identify and briefly: Define the two primary sources of shareholders’ equity.

Explanation of Solution

The two primary sources of shareholders’ equity is:

1. Paid in capital
2. Retained earnings

Paid in capital:

Paid in capital represents the amount invested by the shareholders of the business in common stock and/or preferred stock.

Retained earnings:

Retained earnings are the portion of earnings kept by the business for the purpose of reinvestments, payment of debts, or for future growth.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

To determine

Shareholders’ equity: Shareholders’equity refers to the right the owner possesses over the resources of the business. In other words, Shareholders’equity refers to the amount of capital that includes the amount of investment by the stockholders, earnings generated from the normal business operations, and less any dividends paid to the stockholders.

To identify and briefly: Define the two primary sources of shareholders’ equity.