Question

Comparative statements of shareholders’ equity for Anaconda International Corporation were reported as follows for the fiscal years ending December 31, 2018, 2019, and 2020. ANACONDA INTERNATIONAL CORPORATION Statements of Shareholders' Equity For the Years Ended Dec. 31, 2018, 2019, and 2020 ($ in millions) Preferred Stock $10 par Common Stock $1 par Additional Paid-In Capital Retained Earnings Total Shareholders' Equity Balance at January 1, 2018 85 680 1,948 2,713 Sale of preferred shares 30 930 960 Sale of common shares 7 56 63 Cash dividend, preferred (3 ) (3 ) Cash dividend, common (21 ) (21 ) Net income 380 380 Balance at December 31, 2018 30 92 1,666 2,304 4,092 Retirement of shares (6 ) (48 ) (16 ) (70 ) Cash dividend, preferred (3 ) (3 ) Cash dividend, common (25 ) (25 ) 3-for-2 split effected in the form of a dividend 15 (15 ) Net income 530 530 Balance at December 31, 2019 45 86 1,603 2,790 4,524 Common stock dividend 6 53 (59 ) Cash dividend, preferred (3 ) (3 ) Cash dividend, common (27 ) (27 ) Net income 572 572 Balance at December 31, 2020 45 92 1,656 3,273 5,066 Required: 1. Infer from the statements the events and transactions that affected Anaconda International Corporation’s shareholders’ equity during 2018, 2019, and 2020. Prepare the journal entries that reflect those events and transactions. 2. Prepare the shareholders’ equity section of Anaconda’s comparative balance sheets at December 31, 2020 and 2019.

Answer 1