Hi, I only have 1 question about this problem. How do you calculate or exactly h

Question

Hi,

I only have 1 question about this problem. How do you calculate or exactly how do you know 9280 (common stock) x $1and how do you know 1268 ( preferred stock) x $7. Can you show me how do calculate to have 9280 and 1268 ???? Thank you!

Cash dividend to preferred share 1268 x $7

Cash dividend to common stock 9280 x $1

I DO NOT HOW TO CALCULATE TO HAVE 1268 AND 9280 ?????

Question: On January 1, 2016, Powder Company provided the following shareholders' equity section of its bal...

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Solution.

Preparetion of share sholder equity section.

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Particulars Current Change Closing Capital Stock: Preferred Stock            $100 par              92,800.00             34,000.00           126,800.00 Common Stock             $5 par              37,400.00               9,000.00             46,400.00 Total Capital Stock           130,200.00             43,000.00           173,200.00 Additional Paid in Capital: Paid in Capital in Excess of Par Preferred Stock              21,500.00             10,200.00             31,700.00 Paid in Capital in Excess of Par Common Stock              58,700.00             14,400.00             73,100.00 Paid in Capital from Treasurey Stock                             -   Total Paid in Capital              80,200.00             24,600.00           104,800.00 Retained Earnings           185,700.00             20,794.00           206,494.00 Total Paid in Captal and Retained Earnings           265,900.00             45,394.00           311,294.00 Less Treasurey Stock                             -   Total Stockholders Equity           265,900.00             45,394.00           311,294.00 ded the following shareholder Statement of Shareholders' Equity On January 1, 2016, Powder Company provi equity section of its balance sheet: Contributed Capital: Preferred stock, $100 par $ 92,800 37,400 21,500 58,700 210,400 185,700 396,100 Common stock, $5 par Additional paid-in capital on preferred stock Additional paid-in capital on common stock Total contributed capitdal Retained earnings Total Shareholders' Equity During 2016, the following transactions and events occurred and were properly recorded: 1. Powder issued 1,800 shares of common stock at $13 per share 2. Powder issued 340 shares of preferred stock at $130 per share. 3. Powder earned net income of $38,950 4. Powder paid a $7 per share dividend on the preferred stock and a S1 per share dividend on the common stock outstanding at the end of 2016 Required Prepare Powder's statement of shareholders' equity (include retained earnings) for 2016

Explanation / Answer

Preferred Stock outstanding On January 1, 2016 = 92800/100 = 928 Common Stock outstanding On January 1, 2016 = 37400/5= 7480 Preferred Stock outstanding at the end of 2016 =928+Preferred stock issued during the year = 928+340 = 1268 Common Stock outstanding at the end of 2016 = 7480+Common stock issued during the year = 7480+1800 = 9280

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