Question

Exercise 4-16

Waterway Co. reports the following information for 2017: sales revenue $767,500, cost of goods sold $505,000, operating expenses $84,800, and an unrealized holding loss on available-for-sale securities for 2017 of $52,000. It declared and paid a cash dividend of $12,650 in 2017.

Waterway Co. has January 1, 2017, balances in common stock $360,700; accumulated other comprehensive income $86,400; and retained earnings $91,890. It issued no stock during 2017.

Prepare a statement of stockholders’ equity.

WATERWAY CO. Statement of Stockholders' Equity Accumulated Other Total Retained Earnings Comprehensive Income Common Stock $ $ $ $

Answer 1

Computation of Profit for current year 2017

Particulars	Amount
Sales	7,67,500
Cost of Goods sold	5,05,000
Gross Profit	2,62,500
Operating Expenses	84,800
Operating Profit	1,77,700
Loss on securities(Other Comprehensive Income)	52,000
Profit for the year	1,25,700

Statement of Stockholders Equity

Waterway Co
Statement of Stockholders Equity
Particulars	Total	Retained Earnings	Accumulated other Comprehensive Income	Common Stock
As on 01 Jan 2017	5,38,990	91,890	86,400	3,60,700
Add : Operating Profit	1,77,700	1,77,700	-	-
Add : Other Comrehensive Income	-52,000	-	-52,000	-
Less: Dividend Declared and Paid	-12,650	-12,650	-	-
As on 31 Dec 2017	6,52,040	2,56,940	34,400	3,60,700