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Requirement 2
Transaction
Total
Assets
Total
Liabilities
Total
Stockholders’
Equity
Issue common stock
+
NE
+
Problem 10-3B (LO 10-6)
Before
After 100%
Stock Dividend
After 2-for-1
Stock Split
Common stock, $0.01 par value
$ 11
$ 22
$ 11
Additional paid-in capital
34,990
34,990
34,990
Problem 10-4B (LO 10-7)
Requirement 1
No preferred stock has been issued.
Requirement 3
Requirement 4
Retained earnings, beginning
$45,000,000
Requirement 5
185,000 shares = ($3,700 / $20 per share) in thousands (x 1,000).
Requirement 6
Problem 10-5B (LO 10-7)
Requirement 1
Nautical
Balance Sheet
(Stockholders’ Equity Section)
December 31, 2021
Stockholders’ equity:
Preferred stock, $10 par value
$ 3,000
Requirement 2
Nautical
Statement of Stockholders’ Equity
For the Year Ended December 31, 2021
Preferred
Stock
Common
Stock
Additional
Paid-in
Capital
Retained
Earnings
Treasury
Stock
Total
Stockholders’
Equity
Balance, January 1
$1,250
$3,000
$19,500
$11,500
$ -0-
$35,250
Issue common stock
3,000
27,000
30,000
3-44 Financial Accounting, 5e
Requirement 3
Items 1 and 2 are similar in that item 1 shows the equity balances in a column
format and item 2 shows these same balances across the bottom row. However,
Problem 10-6B (LO 10-2, 10-3, 10-4, 10-5, 10-7)
Requirement 1
February 2, 2021
Debit
Credit
Cash (1,500,000 x $35)
52,500,000
Common Stock (1,500,000 x $5)
7,500,000
Additional Paid-in Capital (difference)
45,000,000
(Issue common stock above par)
August 15, 2021
Cash (112,500 shares x $45)
5,062,500
Treasury Stock (112,500 shares x $30)
3,375,000
Additional Paid-in Capital (112,500 x $15)
1,687,500
(Resell treasury stock above cost)
Problem 10-6B (Continued)
Requirement 2
National League Gear
Balance Sheet
(Stockholders’ Equity Section)
December 31, 2021
Stockholders’ equity:
Preferred stock, $20 par value
$12,000,000
Problem 10-7B (LO 10-8)
Requirement 1
($ in millions)
Net
Income
÷
Average
Stockholders’ Equity
=
Return on
Equity
Requirement 2
Dividends
Per Share
÷
Stock
Price
=
Dividend
Yield
Requirement 3
($ in millions)
Stock Price
÷
Earnings Per Share
=
Price-Earnings
Ratio
DC Menswear
$18.93
÷
($833 / 485)
=
11.0
3-48 Financial Accounting, 5e
ADDITIONAL PERSPECTIVES
Continuing Problem: Great Adventures
AP10-1
Requirement 1
November 5, 2022
Debit
Credit
Cash (100,000 x $12)
1,000,000
November 16, 2022
Treasury Stock (10,000 shares x $15)
150,000
Cash
150,000
(Purchase treasury stock)
November 24, 2022
Cash (4,000 shares x $16)
64,000
December 1, 2022
Dividends
11,400
Dividends Payable
11,400
(Declare cash dividends)
Requirement 2
Great Adventures, Inc.
Balance Sheet
(Stockholders’ Equity Section)
December 31, 2022
Stockholders’ equity:
Common stock, $1 par value
$ 120,000
3-50 Financial Accounting, 5e
Additional Perspective 10-1 (in General Ledger)
Students will be given the following existing trial balance.
Great Adventures, Inc.
Trial Balance
December 31, 2022
(Prior to transactions in AP10-1)
Accounts
Debit
Credit
Cash
$ 77,968
Accounts Receivable
50,000
Allowance for Uncollectible Accounts
$ 2,400
Deferred Revenue
5,000
Warranty Liability
4,000
Contingent Liability
12,000
Income Tax Payable
14,500
Interest Payable
750
Notes Payable (current)
48,014
Loss
12,000
Interest Expense
6,785
