QUESTION3 Not complete 14.40 points out of 20.00 P Flag question Identifying and

Question

QUESTION3 Not complete 14.40 points out of 20.00 P Flag question Identifying and Analyzing Financial Statement Effects of Dividends The stockholders' equity of Kinney Company at December 31, 2011, is shown below. 5% preferred stock, $100 par value, 10,000 shares authorized; 4,000 shares issued and outstanding Common stock, $5 par value, 200,000 shares authorized; 50,000 shares issued and outstanding Paid-in capital in excess of par value-preferred stock Paid-in capital in excess of par value-common stock 400,000 250,000 40,000 300,000 656,000 $1,646,000 Retained earnings Total stockholders' equity The following transactions, among others, occurred during 2012: Apr. 1 Declared and issued a 100% stock dividend on all outstanding shares of common stock. The market value of the stock was $11 per share. Dec. 7 Declared and issued a 3% stock dividend on all outstanding shares of common stock. The market value of the stock was $14 per share. Dec. 20 Declared and paid (1) the annual cash dividend on the preferred stock and (2) a cash dividend of 80 cents per common share. (a) Use the financial statement effects template to indicate the effects of these separate transactions. Us e negative signs with answers , wh en appropriate. Balance Sheet Income Statement Noncash Contributed Earned Net Transaction Cash Asset AssetsLiabilities+ CapitalCapital Revenue Expenses Income Apr.1 Dec. 7 Dec. 20 (b) Compute retained earnings for 2012 assuming that the company reports 2012 net income of $253,000. 0

Explanation / Answer

(a)

Workings:

(b) $514600

Workings:

Transaction Balance Sheet Income Statement Cash Asset + Noncash Assets = Liabilities + Contributed Capital + Earned Capital Revenue - Expenses = Net Income Apr. 1 250000 -250000 Dec. 7 42000 -42000 Dec. 20 -102400 -102400

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