a partial listing of accounts and ending balances for carver inc on December a p

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a partial listing of accounts and ending balances for carver inc on December a partial listing of accounts and ending balances for carver inc on December a partial listing of accounts and ending balances for carver inc on December a partial listing of accounts and ending balances for carver inc on December Problem 2: (10 Points (sim to l-IO A partial listing of accounts and ending balances for Carver, Inc., on December 31, 2016, is shown below: Investments in long-term notes receivable Bonds payable Temporary investment in equity securities available for sale Premium on bonds payable Common stock $40,000 300,000 120,000 26,000 180,000 20,000 24,000 Subscriptions receivable: common stock Additional paid-in capital from preferred stock conversion Retained earnings Preferred stock 650,000 300,000 150,000 Long-term investment in equity securities available for sale Additional paid-in capital on common stock Common stock subscribed Goodwill Donated capital Preferred stock subscribed Additional paid-in capital on preferred stock 910,000 20,000 46,000 35,000 50,000 45,000 Following is additional information relative to the above accounts: The preferred stock is 8% cumulative with par value of $50. For the preferred stock, 10,000 shares have been authorized, 6,000 shares are issued and outstanding, and 1,000 shares have been subscribed at a price of $65 per share. Each share of preferred stock is convertible into four shares of common. Bonds payable mature on September 30, 2020. They have a stated interest rate of 10%, payable semiannually. The straight-line method is used to amortize the premium. Common stock has a par value of $4 per share. For the common stock, 60,000 shares have been authorized, 45,000 shares are issued and outstanding, and 5,000 shares have been subscribed at $32 per share. Required Prepare the contributed capital section of the December 31,2016 balance sheet for Carver, Inc. Include appropriate parenthetical notes for the common and preferred stock

Explanation / Answer

Shareholders Equity = Contributed capital+Retained Earnings Calculation of contributed capital Common Stock Common Stock Subsrcibed Additional Paid in Capital from Common Stock Less: Subscription receivable Preferred Stock Subsrcibed Additional Paid in Capital on Preferred Stock Preferred Stock Additional Paid in Capital from Preferred Stock conversion Total Contributed Capital Note: i) Subscription receivable is a contra Equity account, therfore shown as deduction from contributed capital ii) Assumed that additional paid in capital has taken into consideration all the amounts provided in the note

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