Identifying and Analyzing Financial Statement Effects of Dividends
The stockholders' equity of Kinney Company at December 31, 2011, is shown below.
5% preferred stock, $100 par value, 18,000 shares authorized; 8,000 shares issued and outstanding $ 800,000
Common stock, $5 par value, 200,000 shares authorized; 50,000 shares issued and outstanding 250,000
Paid-in capital in excess of par value—preferred stock 40,000
Paid-in capital in excess of par value—common stock 300,000
Retained earnings 656,000
Total stockholders' equity $2,046,000
The following transactions, among others, occurred during 2012:
Apr. 1 Declared and issued a 100% stock dividend on all outstanding shares of common stock. The market value of the stock was $11 per share.
Dec. 7 Declared and issued a 4% stock dividend on all outstanding shares of common stock. The market value of the stock was $14 per share.
Dec. 20 Declared and paid (1) the annual cash dividend on the preferred stock and (2) a cash dividend of 80 cents per common share.
1. What is the contributed capital and earned capital for December 7th. What is the Cash Asset for Dec 20th.
2. Compute retained earnings for 2012 assuming that the company reports 2012 net income of $253,000.
Analyzing Cash Dividends on Preferred and Common Stock
Potter Company has outstanding 15,000 shares of $50 par value, 6% preferred stock and 60,000 shares of $5 par value common stock. During its first three years in business, it declared and paid no cash dividends in the first year, $240,000 in the second year, and $45,000 in the third year.
(a) If the preferred stock is cumulative, determine the total amount of cash dividends paid to each class of stock in each of the three years.
What is the Common Stock for year 2?
(b) If the preferred stock is noncumulative, determine the total amount of cash dividends paid to each class of stock in each of the three years.
What is the Common Stock and Preferred Stock for year 2?© BrainMass Inc. brainmass.com October 25, 2018, 10:08 am ad1c9bdddf
This solution discusses the analysis of financial statements.
Accounting: Equity statement, Cash flow analysis
Please use separate excel document to answer all questions. Clearly identify negative numbers.
1. on June 23, 2008 Lennar Cosmetics sold $250,000 worth of products to Bynum, with the payment to me made in 90 days on September 20. The goods were shipped to Bynum on July 2. When should the sale should be recognized on:
- June 23, 2008
-July 2, 2008
-September 20, 2008
-none of the above
2. During the last year, Sigma Co had Net income of $148, paid $17 in dividends, and sold new stock for $39. Beginning equity for the year was $610. What was Ending Equity?
3. The following are components of a traditional balance sheet. How much are the total assets of the firm?
Plant & Equipment = $40,800
Common Stock = $15,000
Cash = $5,500
Inventory = $21,700
Bad Debt reserve = $6,000
Paid in excess = $6,000
Accumulated depreciation = $27,000
Accounts receivables = $22,000
4. Brit Corp. bought an oil rig exactly 6 years ago for $113, 000,000. Brit depreciated oil rigs straight line over 10 years assuming no salvage value. (Straight line depreciation means that the yearly depreciation will be purchase price of the oil rig divided by the number of years it will last, which is 10 years here.) The rig was just sold to Cornish Petroleum for $25,000,000. What Capital Gain/Loss will Brit report on this transaction?
5. Ryder Corp. conducted the following activities during 2001: (1) sold $10,000 shares of their own stock for $17.00 per share; (2) they issued bonds for which they received $493,000; (3) they paid dividends to their stockholders totaling $82,000; (4) they sold a piece of equipment for $50,000 that they were carrying on their books for $20,000; (5) they earned net income of $140,000. What would be shown on the Statement of Cash Flows for "Cash from Financial Activities" based on the information above?View Full Posting Details