On December 31, 20X1, the Stockholders Equity section of Mercedes Corporation was as follows: Common stock, par
Question:
On December 31, 20X1, the Stockholders’ Equity section of Mercedes Corporation was as follows:
Common stock, par value $5; authorized 30,000 shares; issued and
outstanding, 9,000 shares .................................... $ 45,000
Additional paid-in capital ......................................... 58,000
Retained earnings ..................................................... 73,000
Total stockholders’ equity .................................. $ 176,000
On March 1, 20X2, the board of directors declared a 10% stock dividend and accordingly issued 900 additional shares. The stock’s fair value at that time was $8 per share. For the three months ended March 31, 20X2, Mercedes sustained a net loss of $16,000.
Required:
What amount should the company report as retained earnings on its quarterly financial statement dated March 31, 20X2?
Step by Step Answer:
Financial Reporting And Analysis
ISBN: 9781260247848
8th Edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer