Power Drive Corporation designs and produces a line of golf equipment and golf a

Question

Power Drive Corporation designs and produces a line of golf equipment and golf apparel. Power Drive has 100,000 shares of common stock outstanding as of the beginning of 2015. Power Drive has the following transactions affecting stockholders' equity in 2015. March 1 Issues 58,000 additional shares of $1 par value common stock for $55 per share. May 10 Repurchases 5,300 shares of treasury stock for $58 per share. June 1 Declares a cash dividend of $1.65 per share to all stockholders of record on June 15. (Hint: Dividends are not paid on treasury stock.) July 1 Pays the cash dividend declared on June 1. October 21 Reissues 2,650 shares of treasury stock purchased on May 10 for $63 per share. Power Drive Corporation has the following beginning balances in its stockholders' equity accounts on January 1, 2015: Common Stock, $100,000; Additional Paid-in Capital, $4,800,000; and Retained Earnings, $2,300,000. Net income for the year ended December 31, 2015, is $630,000. Required: Prepare the statement of stockholders’ equity for Power Drive Corporation for the year ended December 31, 2015.

Explanation / Answer

Statement of Stakholder's Equity

For Power Drive Corporation

For the year end December 31, 2015

Particulars No. of shares Par Value Amount Equity Opening Balance 100000 1 100,000.00 Additional Stock 4,800,000.00 Additional Share 58000 55 3,190,000.00 Treasury Shares 5300 58 307,400.00 Dividend 158000 1.65 260,700.00 Treasury Shares 2650 63 166,950.00 A 8,825,050.00 Reatined Earnings Opening Balance 2,300,000.00 Earned During the year 630,000.00 B 2,930,000.00 Total              A & B 11,755,050.00 Answer

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