Financial Accounting (12th Edition) (What's New in Accounting)
12th Edition
ISBN: 9780134725987
Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.
Publisher: PEARSON
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Chapter 10, Problem 10.26AE
To determine
To prepare: The
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(Learning Objectives 2, 3, 4: Reconstruct transactions from the financial statements)Parker Networking Solutions began operations on January 1, 2018, and immediately issuedits stock, receiving cash. Parker’s balance sheet at December 31, 2018, reported the followingstockholders’ equity:Common stock, $1 par...................... $ 59,000Additional paid-in capital.................. 473,500Retained earnings.............................. 40,000Treasury stock, 300 shares................ (3,600)Total stockholders’ equity............ $568,900During 2018, Parkera. issued stock for $9 per share.b. purchased 800 shares of treasury stock, paying $12 per share.c. resold some of the treasury stock.d. declared and paid cash dividends.
Using Excel to Calculate Equity Balances
PROBLEM
Pasta Creations issued additional shares of common shares,
reported net income, and declared dividends during the
year. Information concerning its equity is provided here.
Beginning of year common shares
Beginning of year retained earnings
Additional common shares issued
Net income reported
Dividends declared
$ 98,000
476,000
52,000
78,000
16,000
Student Work Area
Required: Provide input into cells shaded in yellow in this
template. Input the required mathematical formulas or functions
with cell references to the Problem area or work area as
a. Calculate the ending balances of (1) common shares, (2)
retained earnings, and (3) total shareholders' equity.
Common shares
Retained earnings
Total shareholders' equity
b. Calculate the same amounts if the company had reported a
net loss rather than net income and had not declared any
dividends.
Net loss amount
Common shares
Retained earnings
Total shareholders' equity
$
72,000
You are engaged to audit the financial statements of Sailor Co. The balance sheet below is provided to you:Sailor Co.Balance SheetDecember 31, 2021ASSETS LIABILITIES AND CAPITALCash 290,000.00 Accounts payable 190,000.00 Accounts receivable 139,000.00 Notes payable 83,500.00 Notes receivable 200,000.00 Ordinary share capital 300,000.00 Inventory 357,000.00 Retained earnings 412,500.00 Total 986,000.00 Total 986,000.00 The records of Sailor Co. were reviewed. The following errors were discovered. These errors were not corrected until the current year under audit.a. On July 1, 2019, Sailor paid P150,000 for a 5-year insurance policy. The amount was debited to Insurance Expense when paid.b. Sailor Co. failed to record unearned rent revenue of P16,000 and P9,000 in 2018 and 2020, respectively.c. Sailor Co. also failed to recognize accrued expenses of P23,000, P18,000 and P7,000 for 2018, 2019 and 2020, respectively.d. On December 31, 2019, Sailor Co. bought equipment worth P150,000 and…
Chapter 10 Solutions
Financial Accounting (12th Edition) (What's New in Accounting)
Ch. 10 - The two main categories of stockholders equity are...Ch. 10 - Prob. 2QCCh. 10 - Stockholders of a corporation directly elect the...Ch. 10 - The par value of a share of common stock a. is...Ch. 10 - Prob. 5QCCh. 10 - If a corporation issues 1,000 shares of 1 par...Ch. 10 - Prob. 7QCCh. 10 - Sandusky Corporation purchased 3,000 shares of its...Ch. 10 - Graves Corporation issued 50,000 shares of 1 par...Ch. 10 - Prob. 10QC
Ch. 10 - For cash dividends, the journal entry on the date...Ch. 10 - Prob. 12QCCh. 10 - Prob. 13QCCh. 10 - Prob. 14QCCh. 10 - Prob. 15QCCh. 10 - Prob. 16QCCh. 10 - Prob. 10.1ECCh. 10 - Prob. 10.1SCh. 10 - (Learning Objective 1: Describe characteristics of...Ch. 10 - Prob. 10.3SCh. 10 - Prob. 10.4SCh. 10 - (Learning Objective 2: Record issuance of stock...Ch. 10 - Prob. 10.6SCh. 10 - Prob. 10.7SCh. 10 - Prob. 10.8SCh. 10 - Prob. 10.9SCh. 10 - Prob. 10.10SCh. 10 - (Learning Objective 4: Divide cash dividends...Ch. 10 - Prob. 10.12SCh. 10 - (Learning Objective 6: Prepare the stockholders...Ch. 10 - (Learning Objective 5: Use stockholders equity...Ch. 10 - (Learning Objective 5: Calculate book value per...Ch. 10 - (Learning Objective 5: Calculate and explain...Ch. 10 - (Learning Objective 5: Calculate return on assets...Ch. 10 - Prob. 10.18SCh. 10 - (Learning Objective 2. 5: Define and use various...Ch. 10 - Prob. 10.20SCh. 10 - Prob. 10.21SCh. 10 - Prob. 10.22SCh. 10 - (Learning Objective 1: Identify key terms...Ch. 10 - (Learning Objectives 2, 6: Account for issuance of...Ch. 10 - Prob. 10.25AECh. 10 - Prob. 10.26AECh. 10 - Prob. 10.27AECh. 10 - (Learning Objective 3: Account for the purchase...Ch. 10 - (Learning Objectives 2, 3, 4: Account for issuance...Ch. 10 - (Learning Objective 6: Report stockholders equity...Ch. 10 - Prob. 10.31AECh. 10 - LO 4 (Learning Objective 4: Calculate dividends on...Ch. 10 - Prob. 10.33AECh. 10 - Prob. 10.34AECh. 10 - LO 5 (Learning Objective 5: Calculate and...Ch. 10 - LO 4,6 (Learning Objective 4, 6: Analyze...Ch. 10 - (Learning Objective 5: Evaluate profitability)...Ch. 10 - Prob. 10.38AECh. 10 - LO 6 (Learning Objective 6: Use a companys...Ch. 10 - (Learning Objective 1: Identify key terms...Ch. 10 - (Learning Objectives 2, 6: Account for issuance of...Ch. 10 - Prob. 10.42BECh. 10 - Prob. 10.43BECh. 10 - (Learning Objectives 3, 6: Show how treasury stock...Ch. 10 - (Learning Objective 3: Account for the purchase...Ch. 10 - (Learning Objectives 2, 3, 4: Account for issuance...Ch. 10 - Prob. 10.47BECh. 10 - Prob. 10.48BECh. 10 - Prob. 10.49BECh. 10 - Prob. 10.50BECh. 10 - (Learning Objectives 2, 3, 4: Measure the effect s...Ch. 10 - Prob. 10.52BECh. 10 - (Learning Objective 5: Analyze alternative plans...Ch. 10 - (Learning Objective 5: Evaluate profitability)...Ch. 10 - Prob. 10.55BECh. 10 - Prob. 10.56BECh. 10 - Prob. 10.57QCh. 10 - Prob. 10.58QCh. 10 - Prob. 10.59QCh. 10 - Prob. 10.60QCh. 10 - Prob. 10.61QCh. 10 - Prob. 10.62QCh. 10 - Prob. 10.63QCh. 10 - Prob. 10.64QCh. 10 - Quill Corporation paid 28 per share to purchase...Ch. 10 - Prob. 10.66QCh. 10 - Prob. 10.67QCh. 10 - Prob. 10.68QCh. 10 - Prob. 10.69QCh. 10 - Prob. 10.70QCh. 10 - Prob. 10.71QCh. 10 - Prob. 10.72QCh. 10 - Prob. 10.73QCh. 10 - Prob. 10.74QCh. 10 - Prob. 10.75QCh. 10 - Prob. 10.76APCh. 10 - (Learning Objective 6: Report stockholders equity)...Ch. 10 - (Learning Objectives 2, 4: Analyze stockholders...Ch. 10 - (Learning Objectives 2, 3, 4: Account for stock...Ch. 10 - Prob. 10.80APCh. 10 - Prob. 10.81APCh. 10 - Prob. 10.82APCh. 10 - Prob. 10.83APCh. 10 - Prob. 10.84BPCh. 10 - Prob. 10.85BPCh. 10 - (Learning Objectives 2, 4: Analyze stockholders...Ch. 10 - (Learning Objectives 2, 3, 4: Account for stock...Ch. 10 - Prob. 10.88BPCh. 10 - Prob. 10.89BPCh. 10 - (Learning Objective 5: Differentiate financing...Ch. 10 - Prob. 10.91BPCh. 10 - Prob. 10.92CEPCh. 10 - Prob. 10.93CEPCh. 10 - Prob. 10.94CEPCh. 10 - Prob. 10.95CEPCh. 10 - (Learning Objectives 2, 3, 4, 6: Analyze...Ch. 10 - (Learning Objectives 2, 3, 4: Calculate impact of...Ch. 10 - Prob. 10.98DCCh. 10 - Prob. 10.99DCCh. 10 - Prob. 10.100EICCh. 10 - Prob. 10.101EICCh. 10 - (Learning Objectives 2, 3, 4, 5: Analyze common...Ch. 10 - (Learning Objectives 2, 3, 4: Analyze treasury...
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- The income statement, statement of retained earnings, and balance sheet for Somerville Company are as follows: Includes both state and federal taxes. Brief Exercise 15-20 Calculating the Average Common Stockholders Equity and the Return on Stockholders Equity Refer to the information for Somerville Company on the previous pages. Required: Note: Round answers to four decimal places. 1. Calculate the average common stockholders equity. 2. Calculate the return on stockholders equity.arrow_forwardA public company has the following balance sheet ($000’s) Cash $540 Accounts Receivable $4,580 Inventories $7,400 Long Term Debt $12,590 Net Fixed Assets $18,955 Common Equity $18,885 Total Assets $31,475 Total debt & Equity $31,475 At present, the firm’s common stock is selling for a price equal to its book value, and the form’s bonds are selling at par. The market requires a 15% return on the common stock, the firm’s bond’s command a yield to maturity of 8% and firm faces a tax rate of 34%. What is the firm’s weighted average cost of capital?arrow_forwardYou are engaged to audit the financial statements of Sailor Co. The balance sheet below is provided to you:Sailor Co.Balance SheetDecember 31, 2021ASSETS LIABILITIES AND CAPITALCash 290,000.00 Accounts payable 190,000.00 Accounts receivable 139,000.00 Notes payable 83,500.00 Notes receivable 200,000.00 Ordinary share capital 300,000.00 Inventory 357,000.00 Retained earnings 412,500.00 Total 986,000.00 Total 986,000.00 The records of Sailor Co. were reviewed. The following errors were discovered. These errors were not corrected until the current year under audit.a. On July 1, 2019, Sailor paid P150,000 for a 5-year insurance policy. The amount was debited to Insurance Expense when paid.b. Sailor Co. failed to record unearned rent revenue of P16,000 and P9,000 in 2018 and 2020, respectively.c. Sailor Co. also failed to recognize accrued expenses of P23,000, P18,000 and P7,000 for 2018, 2019 and 2020, respectively.d. On December 31, 2019, Sailor Co. bought equipment worth P150,000 and…arrow_forward
- You are engaged to audit the financial statements of Sailor Co. The balance sheet below is provided to you:Sailor Co.Balance SheetDecember 31, 2021ASSETS LIABILITIES AND CAPITALCash 290,000.00 Accounts payable 190,000.00 Accounts receivable 139,000.00 Notes payable 83,500.00 Notes receivable 200,000.00 Ordinary share capital 300,000.00 Inventory 357,000.00 Retained earnings 412,500.00 Total 986,000.00 Total 986,000.00 The records of Sailor Co. were reviewed. The following errors were discovered. These errors were not corrected until the current year under audit.a. On July 1, 2019, Sailor paid P150,000 for a 5-year insurance policy. The amount was debited to Insurance Expense when paid.b. Sailor Co. failed to record unearned rent revenue of P16,000 and P9,000 in 2018 and 2020, respectively.c. Sailor Co. also failed to recognize accrued expenses of P23,000, P18,000 and P7,000 for 2018, 2019 and 2020, respectively.d. On December 31, 2019, Sailor Co. bought equipment worth P150,000 and…arrow_forwardYou are engaged to audit the financial statements of Sailor Co. The balance sheet below is provided to you:Sailor Co.Balance SheetDecember 31, 2021ASSETS LIABILITIES AND CAPITALCash 290,000.00 Accounts payable 190,000.00 Accounts receivable 139,000.00 Notes payable 83,500.00 Notes receivable 200,000.00 Ordinary share capital 300,000.00 Inventory 357,000.00 Retained earnings 412,500.00 Total 986,000.00 Total 986,000.00 The records of Sailor Co. were reviewed. The following errors were discovered. These errors were not corrected until the current year under audit.a. On July 1, 2019, Sailor paid P150,000 for a 5-year insurance policy. The amount was debited to Insurance Expense when paid.b. Sailor Co. failed to record unearned rent revenue of P16,000 and P9,000 in 2018 and 2020, respectively.c. Sailor Co. also failed to recognize accrued expenses of P23,000, P18,000 and P7,000 for 2018, 2019 and 2020, respectively.d. On December 31, 2019, Sailor Co. bought equipment worth P150,000 and…arrow_forwardRequired information [The following information applies to the questions displayed below.] The stockholders' equity section of The Seventies Shop is presented here. THE SEVENTIES SHOP Balance Sheet (partial) ($ in thousands) Stockholders' equity: Preferred stock, $50 par value Common stock, $5 par value Additional paid-in capital Total paid-in capital Retained earnings Treasury stock Total stockholders' equity $0 13,000 28,600 Basec the stockholders' equity section of The Seventies Shop, answer the following questions. Remember that all amounts are presented in thousands. Average price 41,600 46,000 (2,300) $85,300 3. Total paid-in capital is $41.60 million. At what average price per share were the common shares issued? per sharearrow_forward
- Academy Driving School reported the following amounts in its financial statements: Year 1 Year 2 Number of common shares 11,600 11,600 Net income $ 24,360 $ 19,360 Cash dividends paid on common stock $ 3,100 $ 3,100 Total stockholders' equity $ 250,000 $ 230,000 Calculate EPS and ROE for Year 2. (Round EPS to 2 decimal places and ROE to 1 decimal place.)arrow_forwardStockholders' Equity: Transaction Descriptions from Account Data The following T-accounts contain keyed entries representing five transactions involving the stockholders' equity of Riverview, Inc.: Land (1) 65,000 (2) 54,000 (5) Date 1 2 Cash *1,200 shares of common stock 3 4 10,920 5 18,000 (4) Preferred Stock, $55 Par 55,000 (1) Required Using this information, give detailed descriptions, including number of shares and price per share when applicable, for each of the five transactions. General Journal Paid-in Capital in Excess of Par value-Common Stock 7.000 (3) Paid-in Capital from Treasury Stock 3,120 (5) Common Stock Description Paid-in-Capital in Excess of Par Value - Preferred Stock Issued shares of preferred stock at per share. Issued shares of common stock at par value. Issued shares of common stock in exchange for land. Treasury Stock - Common Purchased shares of treasury stock for per share. Sold shares of treasury stock for per share. ♦ $ + " ÷ + 47 ÷ + (3) 91,000 Debit…arrow_forwardGiven the following data for the Vaughn Manufacturing: Current liabilities $550 Long-term debt 510 Common stock 744 Retained earnings 1296 Total liabilities & stockholders’ equity $3100 How would common stock appear on a common size balance sheet? 26% 16% 24% 58%arrow_forward
- SECOND BANK PROVIDES THE FOLLOWING EQUITY DATA: REGULATORY EQUITY RELATED ACCOUNTS COMMON STOCK 4,000.00 PREFERRED STOCKS 900.00 RETAINED EARNINGS 3,001.00 CAPITAL NOTES 1,000.00 SUBORDINATED DEBT 4,000.00 RESERVE FOR LOAN LOSSES 800.00 RISK WEIGHTED ASSETS 60,000.00 How much is Tier 2? Seleccione una: $7,901 $6,475 $6,038 $6,088 $13,701 $7,226 NOT ENOUGH DATA TO ANSWERarrow_forwardOBLEMS Required information [The following information applies to the questions displayed below.] The stockholders' equity section of The Seventies Shop is presented here. THE SEVENTIES SHOP Balance Sheet (partial) ($ in thousands) Stockholders' equity: Preferred stock, $50 par value Common stock, $5 par value Additional paid-in capital Total paid-in capital Retained earnings Treasury stock Total stockholders' equity $0 13,000 28,600 Dividends paid 41,600 46,000 (2,300) $85,300 Saved Based on the stockholders' equity section of The Seventies Shop, answer the following questions. Remember that all amounts are presented in thousands. 4. If retained earnings at the beginning of the period was $39 million and net income during the year was $10,438,750, how much was paid in dividends for the year? (Enter your answer in dollars not in millions. (i.e., 5 should be entered as 5,000,000).)arrow_forwardThe following selected data were taken from the financial statements of Vidahill Inc. for December 31, 20Y7, 20Y6, and 20Y5: December 31 20Y7 20Y6 20Y5 Total assets $275,000 $248,000 $221,000 Notes payable (8% interest) 90,000 90,000 90,000 Common stock 36,000 36,000 36,000 Preferred 3% stock, $100 par 18,000 18,000 18,000 (no change during year) Retained earnings 102,555 70,255 54,000 The 20Y7 net income was $32,840, and the 20Y6 net income was $16,795. No dividends on common stock were declared between 20Y5 and 20Y7. Preferred dividends were declared and paid in full in 20Y6 and 20Y7. a. Determine the return on total assets, the return on stockholders' equity, and the return on common stockholders’ equity for the years 20Y6 and 20Y7. Round percentages to one decimal place. Return on total assets Return on stockholders’ equity Return on common stockholders’ equityarrow_forward
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