The shareholders equity section of Fogo Ltd s balance sheet is
The shareholders’ equity section of Fogo Ltd.’s balance sheet is shown below:
Fogo Ltd.
Extracts from the December 31, 2017 balance sheet
Shareholders’ equity
Preferred stock (authorized 100,000; outstanding 25,000).. $1,250,000
Common shares (authorized 1,000,000; outstanding 500,000).. 1,800,000
Retained earnings................. 6,880,000
Total shareholders’ equity.............. $9,930,000
During 2018, the following occurred:
i. On January 31, 50,000 common shares were issued for.... $200,000.
ii. On July 31, 75,000 common shares were issued for ..... $350,000.
iii. Dividends on preferred stock of $100,000 were declared and paid.
iv. Dividends on common shares of $400,000 were declared and paid.
v. Net income for 2018 was $1,950,000.

a. Calculate the weighted-average number of common shares outstanding during 2018.
b. Calculate basic earnings per share for the year ended December 31, 2018.
c. Calculate return on shareholders’ equity for the year ended December 31, 2018.
d. Prepare the shareholders’ equity section for Fogo’s December 31, 2018 balance sheet.

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