4. Exercise 10-12 Prepare a statement of stockholders equity (LO7) Power Drive C
ID: 2600156 • Letter: 4
Question
4. Exercise 10-12 Prepare a statement of stockholders equity (LO7)
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.
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, $3,900,000; and Retained Earnings, $1,400,000. Net income for the year ended December 31, 2015, is $540,000.
Prepare the statement of stockholders’ equity for Power Drive Corporation for the year ended December 31, 2015. (Amounts to be deducted should be indicated by a minus sign.)
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 49,000 additional shares of $1 par value common stock for $46 per share. May 10 Repurchases 4,400 shares of treasury stock for $49 per share. June 1 Declares a cash dividend of $1.20 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 2,200 shares of treasury stock purchased on May 10 for $54 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, $3,900,000; and Retained Earnings, $1,400,000. Net income for the year ended December 31, 2015, is $540,000.
Required:Prepare the statement of stockholders’ equity for Power Drive Corporation for the year ended December 31, 2015. (Amounts to be deducted should be indicated by a minus sign.)
4 T 25.00 points Exercise 10-12 Prepare a statement of stockholders equity (LO7) Power Drive Corporation designs and produces a line of golf equipment and golf apparel. Power Drive has transactions affecting stockholders' equity in 2015. Issues 49,000 additional shares of $1 par value common stock for $46 per share. Repurchases 4,400 shares of treasury stock for $49 per share. Declares a cash dividend of $1.20 per share to all stockholders of record on June 15. (Hint: Dividends are not paid on treasury stock.) Pays the cash dividend declared on June 1 Reissues 2,200 shares of treasury stock purchased on May 10 for $54 per share. March May June 1 10 1 July 1 October 21 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, $3,900,000; and Retained Earnings, $1,400,000. Net income for the year ended December 31, 2015, is $540,000. Required Prepare the statement of stockholders' equity for Power Drive Corporation for the year ended December 31, 2015. (Amounts to be deducted should be indicated by a minus sign.) POWER DRIVE CORPORATION Statement of Stockholders' Equity For the Year Ended December 31, 2015 Total Additional Retained Common Stock Paid-in Captal Earnings Earnings Treasury Stock Stockholders Equity $ 5,400,000 Balance, January 1 Issue common stock Purchase treasury stock Cash dividends Sale of treasury stock Net income Balance, December 31 $100,000$ 3,900,000$1,400,000$
Explanation / Answer
POWER DRIVE CORPORATION Statement of Stockholders'Equity For the year ended December 31,2015 Common Stock Additional paid in Capital Retained earnings Treasury stock Total Stockholders'equity Balance, January 1 $100,000 $3,900,000 $1,400,000 $0 $5,400,000 Mach 1 Issue common stock $49,000 $2,205,000 $2,254,000 Additional paid in capital=49000*$(46-1) May 10 Purchase treasury stock ($215,600) ($215,600) Treasury stock=$49*4400 June 1 Cash dividends ($173,520) ($173,520) (Cash dividend=(100000+49000-4400)*$1.2 October 21 Sale of treasury stock $11,000 $107,800 $118,800 Treasury stock=$49*2200 Additional paid in=2200*(54-49) December 31 Net Income $540,000 $540,000 Balance, December 31 $149,000 $6,116,000 $1,766,480 ($107,800) $7,923,680
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