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Chapter 11 Corporations: Organization, Stock Transactions, and Dividends

EX 11-16 Stockholders’ Equity section of balance sheet OBJ. 5 Specialty Auto Racing Inc. retails racing products for BMWs, Porsches, and Ferraris. The following accounts and their balances appear in the ledger of Specialty Auto Racing Inc. on July 31, the end of the current year: Common Stock, 36 par . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,080,000 Paid-In Capital from Sale of Treasury Stock—Common . . . . . . . . . . . . . . . . . . . 340,000 Paid-In Capital in Excess of Par—Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . 420,000 Paid-In Capital in Excess of Par—Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . 384,000 Preferred 1 Stock, 150 par . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,200,000 Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71,684,000 Treasury Stock—Common . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,008,000 Fifty thousand shares of preferred and 300,000 shares of common stock are authorized. There are 24,000 shares of common stock held as treasury stock. Prepare the Stockholders’ Equity section of the balance sheet as of July 31, the end of the current year using Method 1 of Exhibit 4. EX 11-17 Retained earnings statement OBJ. 5 Atlas Pumps Corporation, a manufacturer of industrial pumps, reports the following results for the year ended January 31, 2014: Retained earnings, February 1, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,110,000 Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,330,000 Cash dividends declared . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 Stock dividends declared . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400,000 Prepare a retained earnings statement for the fiscal year ended January 31, 2014. EX 11-18 Stockholders’ Equity section of balance sheet OBJ. 5 List the errors in the following Stockholders’ Equity section of the balance sheet prepared as of the end of the current year: Stockholders’ Equity Paid-in capital: Preferred 2 stock, 80 par 125,000 shares authorized and issued. . . . . . . . . . . . . . . . 10,000,000 Excess of issue price over par . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500,000 10,500,000 Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96,700,000 Treasury stock 75,000 shares at cost. . . . . . . . . . . . . . . . . . . . . 1,755,000 Dividends payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 430,000 Total paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109,385,000 Common stock, 20 par 1,000,000 shares authorized, 825,000 shares issued . . . . . . . . . . . . . . . . . . . . 17,655,000 Organizing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300,000 Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127,340,000 EX 11-19 Statement of stockholders’ equity OBJ. 5 The stockholders’ equity T accounts of I-Cards Inc. for the current fiscal year ended December 31, 2014, are as follows. Prepare a statement of stockholders’ equity for the fiscal year ended December 31, 2014. COMMOn STOCk Jan. 1 Balance 4,800,000 Apr. 14 Issued 30,000 shares 1,200,000 Dec. 31 Balance 6,000,000 Total stockholders’ equity, 89,100,000 Retained earnings, January 31, 55,040,000 Corrected total stockholders’ equity, 122,800,000 Total stockholders’ equity, Dec. 31, 21,587,000 Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook andor eChapters. Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

Chapter 11 Corporations: Organization, Stock Transactions, and Dividends