The stockholders' equity section of Ruff Corporation's balance sheet on December 31, 20x7, follows. Contributed capital Common

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The stockholders' equity section of Ruff Corporation's balance sheet on December 31, 20x7, follows.

Contributed capital

Common stock, $2 par value, 250,000 shares

Authorized, 200,000 shares issued and outstanding...................... $ 400,000

Additional paid-in capital...................................................... 600,000

Total contributed capital.................................................... $1,000,000

Retained earnings..............................................................2,100,000

Total stockholders' equity.................................................. $3,100,000

Prepare a statement of stockholders' equity for the year ended December 31, 20x8, assuming these transactions occurred in sequence in 20x8:

a. Issued 5,000 shares of $100 par value, 9 percent cumulative preferred stock at par after obtaining authorization from the state.

b. Issued 20,000 shares of common stock in connection with the conversion of bonds having a carrying value of $300,000.

c. Declared and issued a 2 percent common stock dividend. The market value on the date of declaration was $14 per share.

d. Purchased 5,000 shares of common stock for the treasury at a cost of $16 per share.

e. Earned net income of $230,000.

f. Declared and paid the full year's dividend on preferred stock and a dividend of $.40 per share on common stock outstanding at the end of the year.

g. Had foreign currency translation adjustment of minus $50,000.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Principles of Accounting

ISBN: 978-0618736614

10th edition

Authors: Belverd Needles, Marian Powers, Susan Crosson

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