CINRICH Corporation was organized on January 1, 2018. It is
authorized to issue 22,000 shares of $3-noncumulative preferred
shares and an unlimited number of common shares. The following
share transactions were completed during the first year.
Jan. | 1 | Issued 84,000 common shares for cash at $3 per share. | |
Mar. | 1 | Issued 12,500 preferred shares for cash at $57 per share. | |
May | 1 | Issued 116,000 common shares for cash at $5 per share. | |
Sept. | 1 | Issued 4,800 common shares for cash at $6 per share. | |
Nov. | 1 | Issued 3,000 preferred shares for cash at $59 per share. | |
Dec. | 1 | Declared the annual preferred dividend to the preferred shareholders, to shareholders of record on December 15, payable on January 15, 2019. | |
Dec. | 31 | Reported net income of $168,000 for the year. |
Please prepare the shareholders’ equity section of the statement of financial position at December 31, 2018.
CINRICH | |
Balance sheet (partial) | |
At December 31,2018 | |
Stockholder's equity: | |
Preferred stock, no par, $3 non-cumulative, 15,500 shares issued and outstanding | $ 889,500 |
Common stock, no par, 204,800 shares issued and outstanding | $ 860,800 |
Paid in capital | $ 1,750,300 |
Retained earnings | $121,500 |
Total stockholder's equity | $ 1,871,800 |
Calculations:
Common shares | ||||
Shares | x | per share | = | Total |
84000 | x | $ 3 | = | $ 252,000 |
116000 | x | $ 5 | = | $ 580,000 |
4800 | x | $ 6 | = | $ 28,800 |
204800 | $ 860,800 |
Preference Shares | ||||
Shares | x | per share | = | Total |
12500 | x | $ 57 | = | $ 712,500 |
3000 | x | $ 59 | = | $ 177,000 |
15500 | $ 889,500 |
Retained earnings | ||
Net income | $168,000 | |
Less: Cash dividends (15,500 preferred x $3 dividend per share) | ($46,500) | |
Retained earnings, Dec 31,2018 | $121,500 |
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