1. Record the entries given and any related closing entries

2. Create a Statement of Comprehensive Income

3. Create a Statement of Changes in Shareholders’ Equity

4. Create the Equity Section of the Balance Sheet (Statement of Financial Position)

Question

The shareholders’ equity accounts of Tsui, Inc. at December 31, 2013 are as follows: Preferred shares, $3 noncumulative, unlimited number authorized, 4000 issued $400,000 Common shares, unlimited number authorized, 160,000 issued 800,000 Retained earnings 450,000 Accumulated other comprehensive loss (50,000) Tsui has a 35% income tax rate. During the following fiscal year, ended December 31, 2014, the company had the following transactions and events:

Feb. 1 Discovered a $70,000 overstatement of ending inventory from 2013 (Prior Period Error)

July 12 Announced a 2-for-1 preferred stock split. The market price of the preferred shares at the date of announcement was $150.

Oct. 1 Reacquired 20,000 of the common shares at $4 per share.

Dec. 1 Declared a 10% stock dividend to common shareholders of record at Dec. 20, distributable on

Jan. 12. The fair value of the common shares was $12.

Dec 18 Declared the annual cash dividend ($1.50 PS now post-split) to the preferred shareholders of record on Jan. 10, 2015, payable on Jan. 31, 2015

Dec 31 Determined that for 2014, profit before income tax was $350,000 and other comprehensive income from a gain in equity investments of $100,000, net of income tax expense of $35,000, was $65,000.

Answer rating: 100% (QA)

1 Pretax Income 350000 Preferred Stock Dividend 14000 Common Stock Dividend 40000 Income Tax Expense 122500 Other Comprehensive Income 65000 1102015 C... View the full answer