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2.
*
**
4.
Stockholders' Equity
Kraft Unlimited, Inc.
Balance Sheet
August 31, 2014
Contributed capital:
$110,000 + $5,500 + $100,000 + $30,000 = $245,500
$241,010
P4. Comprehensive Stockholders’ Equity Transactions and Stockholders’ Equity
(Concluded)
= 4.8%=**
Rounded
Kraft Unlimited's dividend yield is only 0.1 percent, which means that investors must
also consider changes in the price of the company's stock. A return on equity of only
13-25
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
1.
4
2. Treasury stock is a repurchase of a company's own common stock. To treat it as an
sult of buying treasury stock is to reduce the number of shares outstanding, thereby
reducing the assets and the stockholders' equity of the company. One or more in-
vestors have given up an investment in the company and received assets in the
form of cash back from the company.
Cash
Common Stock
P5. Treasury Stock
Note: There are abnormal balances because there are no data about the beginning
13-26
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1.
1
×3 =
2.
3.
Your proportionate share would be the same because other shareholders would
receive the same proportionate distributions.
If you owned 2,000 shares of Minh on March 1, 2014, you would own 6,930
shares on February 15, 2015 (calculation below).
*$240,000 – $310,800 + $494,000 = $423,200
$1,049,000
423,200
$ 625,800
Retained earnings*
Total contributed capital
Total stockholders' equity
Contributed capital:
Additional paid-in capital
348,600
September 10 — no entry
P6. Dividends, Stock Splits, and Stockholders’ Equity
84,000
252,000Shares outstanding after split:
Stockholders' Equity
December 31, 2014
Minh, Inc.
Common Stock Distributable
Common Stock
April 20 — no entry
13-27
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
1. 2015
Jan. 4
Dec. 15
No entry required.
No entry required.
P7. Comprehensive Stockholders’ Equity Transactions
13-28
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
11/28
12/31
2.
3,126,400
8,000
$5,356,000
297,600
$5,653,600
$5,605,600
P7. Comprehensive Stockholders’ Equity Transactions (Continued)
T accounts for stockholders' equity
Preferred Stock Common Stock
*Cash dividends declared and stock dividends declared reduce Retained Earnings.
December 31, 2015
436,000
708,000
Delux Corporation
Stockholders' Equity
Contributed capital:
Total contributed capital and retained earnings
Additional paid-in capital
Paid-in capital, treasury stock
Total contributed capital
Total stockholders' equity
Retained earnings
*
13-29
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
3.
**
P7. Comprehensive Stockholders’ Equity Transactions (Concluded)
Rounded
December 31, 2014
Common stock:
13-30
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
1.
2.
3.
Contributed capital:
*120,000 shares × $0.40 = $48,000
Additional paid-in capital
$1,342,000
$1,492,000
32,000
$1,460,000
150,000
Total stockholders' equity
P8. Common Stock Transactions and Stockholders’ Equity
Cash Dividends Payable
Alternate Problems
Stockholders' Equity
Retained earnings*
Total contributed capital and retained earnings
Less treasury stock, common (10,000 shares, at cost)
420,000
Canterbury Corporation
Stockholders' Equity
November 30, 2014
Total contributed capital
The cash dividend declaration on November 30 will not affect net income and will
13-31
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
1.
Per Per Dividends
Share* Amount Share** Allocated
3.
***
Common Stock
Cumulative
P9. Preferred and Common Stock Dividends and Dividend Yield
Dividends Total
Preferred Stock
Amount
Dividends
=
2013
Dividends per Share
Market Price per Share
Dividends Yield
Rounded
13-32
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied, duplicated, or posted to a publicly accessible website, in whole or in part.
