The following summaries for Maryland Service, Inc., and Grapone, Co., provide the information needed to prepare the

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The following summaries for Maryland Service, Inc., and Grapone, Co., provide the information needed to prepare the stockholders’ equity section of each company’s balance sheet. The two companies are independent.
* Maryland Service, Inc.: Maryland is authorized to issue 44,000 shares of $1 par common stock. All the stock was issued at $11 per share. The company incurred net losses of $47,000 in 2009 and $15,000 in 2010. It earned net income of $32,000 in 2011 and $178,000 in 2012. The company declared no dividends during the four-year period.
* Grapone, Co.: Grapone’s charter authorizes the issuance of 70,000 shares of 5%, $14 par preferred stock and 470,000 shares of no-par common stock. Grapone issued 1,400 shares of the preferred stock at $14 per share. It issued 130,000 shares of the common stock for $260,000. The company’s retained earnings balance at the beginning of 2012 was $60,000.
Net income for 2012 was $98,000, and the company declared the specified preferred dividend for 2012. Preferred dividends for 2011 were in arrears.
Requirement
1. For each company, prepare the stockholders’ equity section of its balance sheet at December 31, 2012. Show the computation of all amounts. Entries are not required.

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...
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Financial and Managerial Accounting

ISBN: 978-0132497978

3rd Edition

Authors: Horngren, Harrison, Oliver

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