The December 31, 2020, equity section of ZoomZoom Inc.s balance sheet appears below. ZoomZoom Inc. Equity Section
Question:
The December 31, 2020, equity section of ZoomZoom Inc.’s balance sheet appears below.
ZoomZoom Inc.
Equity Section of the Balance Sheet
December 31, 2020
Contributed capital:
Preferred shares, $3.75 cumulative,
40,000 shares authorized and issued ............................................. $1,660,000
Preferred shares, $10 non-cumulative,
8,000 shares authorized and issued..................................................... 670,000
Common shares, 400,000 shares authorized and issued .............. 1,750,000
Total contributed capital .................................................................. $4,080,000
Retained earnings .................................................................................. 741,600
Total equity ........................................................................................ $4,821,600
Required
All the shares were issued on January 1, 2018 (when the corporation began operations). No dividends had been declared during the first two years of operations (2018 and 2019). During 2020, the cash dividends declared and paid totalled $613,300.
1. Calculate the amount of cash dividends paid during 2020 to each of the three classes of shares.
2. Assuming profit earned during 2020 was $1,250,000, determine the December 31, 2019, balance in retained earnings.
3. Prepare a statement of changes in equity for the year ended December 31, 2020.
Balance SheetBalance 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... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Step by Step Answer:
Fundamental Accounting Principles Volume II
ISBN: 978-1260305838
16th Canadian edition
Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann