Question: On January 1 2016 Knox Company showed the following alphabetical

On January 1, 2016, Knox Company showed the following alphabetical list of shareholders’ equity items:
Additional paid-in capital on common stock ........ $130,000
Additional paid-in capital on preferred stock ....... 6,000
Common stock, $10 par ................ 100,000
Preferred stock, $100 par ............... 50,000
Retained earnings .................. 224,000
During 2016, the following events occurred and were properly recorded by the company:
1. Knox purchased an investment in available-for-sale securities. At year- end, the fair value of the securities had increased by $9,000.
2. Knox issued 2,000 shares of common stock for $25 per share.
3. Knox issued 110 shares of preferred stock for $116 per share.
4. Knox reacquired 400 shares of its common stock as treasury stock at a cost of $26 per share.
5. Knox earned net income of $57,000.
6. Knox paid a $7 per share dividend on the preferred stock and a $1.25 per share dividend on the common stock outstanding at the end of 2016 (treasury stock is not entitled to dividends).
Prepare a statement of shareholders’ equity for 2016, including retained earnings.

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  • CreatedOctober 05, 2015
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