Question

Use a spreadsheet or table format like the one in the first practice problem to track the changes in all of the shareholders' equity accounts over the two-year period. (If an amount reduces the account balance then enter with negative sign, e.g.-15,000 or in parenthesis, e.g. (15,000).) Preferred Shares Common Shares Retained Earnings Shares issued Shares issued Net income 2019 Pref. dividends Common dividends Stock dividends Net income 2020 Prepare the shareholders' equity section of the statement of financial position at the end of the second year. Equitee Corporation Shareholders' Equity December 31, 2020

Answer 1

F Preferred shares 3,000 $60,000 Common shares 10,000 3,000 Shares issued Shares issued Net income 2019 Pref. dividends Common dividends Stock dividends Net income 2020 $ Retained earnings $150,000 $60,000 $ 120,000 $ 18,000 -$ 52,000 $ 26,000 -$ 26,000 $ 175,000 $ 236,000 $ 199,000 1300 3,000 $60,000 14,300

Working note:

A C D E F Retained earnings Preferred shares $ 3000 60000 common shares $ 10000 =10000*15 3000 60000 Shares issued Shares issued Net income 2019 Pref. dividends Common dividends Stock dividends Net income 2020 =13000*10% =13000*10%*20 =1020000-900000 -3*2*3000 2-4*13000 --13000*10%*20 =1200000-1025000 LESUM(G3:59) =SUM(C3:09) =SUM(D3:09) -SUM(E3:59) =SUM(F3:F9)

Equitee Corporation Shareholders' Equity December 31, 2020 Stockholders' Equity: Preferred stock Common stock Retained earnings Total stockholders' equity $ 60,000 $ 236,000 $ 199,000 $495.000