At the beginning of 2007, JR Companys stockholders equity was as follows: Common stock , $5 par

Question:

At the beginning of 2007, JR Company’s stockholders’ equity was as follows:

Common stock, $5 par .......$35,000

Additional paid-in capital ..... 49,000

Retained earnings ......... 63,000

During 2007, the following events and transactions occurred:

1. The company earned sales revenues of $108,000. It incurred cost of goods sold of $62,000 and operating expenses of $12,000.

2. The company issued 1,000 shares of its $5 par common stock for $14 per share.

3. The company invested $30,000 in available-for-sale securities. At the end of the year, the securities had a market value of $35,000.

4. The company paid dividends of $6,000.

The income tax rate on all items of income is 30%.

Required

1. Prepare a 2007 income statement for JR Company which includes comprehensive income (ignore earnings per share).

2. Instead, prepare

(a) A 2007 income statement (ignore earnings per share), and

(b) A 2007 statement of comprehensive income.

3. Instead, prepare

(a) A 2007 income statement (ignore earnings per share), and

(b) A 2007 statement of changes in stockholders’ equity that includes comprehensive income.

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...