Anoka Company reported the following selected items in the shareholders' equity section of its balance sheet on

Question:

Anoka Company reported the following selected items in the shareholders' equity section of its balance sheet on December 31, 2013, and 2014:

The preferred shares were outstanding during all of 2013 and 2014; annual dividends were declared and paid in each year. During 2013, 2,000 common shares were sold for cash on October 4. During 2014, a 20% stock dividend was declared and issued in early May. At the end of 2013 and 2014, the common stock was selling for $25.75 and $32.20, respectively. The company is subject to a 30% income tax rate.
Required:
1. Prepare the comparative 2013 and 2014 income statements (multiple-step), and the related note that would appear in Anoka's 2014 annual report.
2. Next Level Compute the price/earnings ratio for 2014. How does this compare to 2013? Why is it different?

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...