Question

2. Destiny Calling, Co. reported the following information in the equity section of their balance sheet at December 31, 2019: Stockholders' equity: Preferred stock, $0.02 par $0 Common stock, $0.01 par (300,000 shares issued and outstanding) $3,000 Additional paid-in capital 109,421 47,388 Retained earnings $159.809 Total equity Duri#2020, Destiny Calling completed these transactions that affected stockholders' equity: January 9 Issued 2,500 shares of common stock for $20 per share. March 15 Reacquired 1,000 shares of common stock as treasury stock, paying $9 per share. June 1 Declared a cash dividend of $0.01 per common share, payable to all stockholders of record on June 15, 2020. Paid the cash dividend. June 30 October 17 Issued 1,700 shares of common stock for $22 per share. a. Record all the journal entries for Destiny Calling's transactions listed above. | b. Taking into account all of the information and all of the transactions above, prepare a statement of Stockholders' Equity for Destiny Calling for the period ended December 31, 2020. Use the format used in the pre-recorded lecture videos and also provided in your e-text, Illustration 10-20. Assume net income for 2020 was $ 19,080. Calculate the number of shares of Common Stock that would be outstanding as of December 31, 2020. Show all calculations.

Answer 1

Request please share format always to give exact answer Question No. В there is format specified. Answer is given as per standard format a Debit $50,000 Credit 2,500*$20 $25 2,500*$0.01 $49,975 $9,000 $9,000 $3,015 Date Account Titles and Explanation Jan 9 Cash Common stock Additional paid in capital (To record issue of common stock) March 15 Treasury stock Cash (To record purchase of treasury stock) June 1 Retained Earnings Dividend payable - Common stock (To record proposed dividend on Common stock) June 30 Dividend payable-Common stock Cash (To record payment of dividend) Oct 17 Cash Common stock Additional paid in capital (To record issue of common stock) 301,500*$0.01 $3,015 $3,015 $3,015 $37,400 1,700*$22 $17 1,700*$0.01 $37,383 Note: Dividend is not given on treasury stock. So shares eligible for dividend is (300,000+ 2,500- 1,000) =301,500

b Destiny Calling Co. Statement of Stockholders' Equity For the Year Ended December 31, 2020 Common Additional Retained Treasury Stock Paid in Stock $0.01 Par capital Earnings Balance, January 1, 2020 $3,000 $109,421 $47,388 $0 Issued 4,200 shares of Common Stock $421 $87,358 Purchased 1,000 shares as Treasury Stock -$9,000 Net Income $19,080 Dividends $3,015 Balance, Dec. 31, 2020 $3,042 $196,779 $63,453 $9,000 Total Stockholders' Equity $159,809 $87,400 -$9,000 $19,080 -$3,015 $254,274 c Outstanding shares as on December 31, 2020 Opening shares Add: Issue of shares 300,000 4,200 304,200 1,000 303,200 Less: Treasury shares Outstanding shares