On December 31, 2013, Andes Company had 1,500,000 shares of $10 par common stock issued and outstanding. The stockholders equity accounts at December 31, 2013, had the following balances. Common Stock .......... $15,000,000 Additional Paid-in Capital ....... 1,500,000 Retained Earnings ......... 900,000 Transactions during 2014 and other information related to stockholders equity accounts were as follows. 1. On January 10,

Chapter 11, Problem Set B #5
On December 31, 2013, Andes Company had 1,500,000 shares of $10 par common stock issued and outstanding. The stockholders’ equity accounts at December 31, 2013, had the following balances.
Common Stock .......... $15,000,000
Additional Paid-in Capital ....... 1,500,000
Retained Earnings ......... 900,000
Transactions during 2014 and other information related to stockholders’ equity accounts were as follows.
1. On January 10, 2014, Andes issued at $105 per share 100,000 shares of $100 par value, 8% cumulative preferred stock.
2. On February 8, 2014, Andes reacquired 20,000 shares of its common stock for $14 per share.
3. On June 8, 2014, Andes declared a cash dividend of $1 per share on the common stock outstanding, payable on July 10, 2014, to stockholders of record on July 1, 2014.
4. On December 15, 2014, Andes declared the yearly cash dividend on preferred stock, payable January 10, 2015, to stockholders of record on December 15, 2014.
5. Net income for the year is $3,600,000.
6. It was discovered that depreciation expense had been understated in 2013 by $65,000.

Instructions
(a) Prepare a retained earnings statement for the year ended December 31, 2014.
(b) Prepare the stockholders’ equity section of Andes’s balance sheet at December 31, 2014.

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...

This problem has been solved!


Do you need an answer to a question different from the above? Ask your question!
Related Book For answer-question

Financial and managerial accounting

1st edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

ISBN: 978-1118016114