In: Accounting
The stockholders’ equity accounts of Bramble Corp. on January 1,
2017, were as follows.
Preferred Stock (7%, $100 par noncumulative, 4,200 shares authorized) | $252,000 | |
Common Stock ($5 stated value, 300,000 shares authorized) | 1,250,000 | |
Paid-in Capital in Excess of Par Value—Preferred Stock | 12,600 | |
Paid-in Capital in Excess of Stated Value—Common Stock | 480,000 | |
Retained Earnings | 688,500 | |
Treasury Stock (4,200 common shares) | 33,600 |
During 2017, the corporation had the following transactions and
events pertaining to its stockholders’ equity.
Feb. | 1 | Issued 4,730 shares of common stock for $33,110. | |
Mar. | 20 | Purchased 1,050 additional shares of common treasury stock at $8 per share. | |
Oct. | 1 | Declared a 7% cash dividend on preferred stock, payable November 1. | |
Nov. | 1 | Paid the dividend declared on October 1. | |
Dec. | 1 | Declared a $0.40 per share cash dividend to common stockholders of record on December 15, payable December 31, 2017. | |
Dec. | 31 | Determined that net income for the year was $283,900. Paid the dividend declared on December 1. |
A. Enter the beginning balances in the accounts and post the journal entries to the stockholders’ equity accounts. (Post entries in the order of journal entries posted in the previous part. For accounts that have zero ending balance, the entry should be the balance date and zero for the amount.)
B Prepare the stockholders’ equity section of the balance sheet at December 31, 2017.
C. Calculate the payout ratio, earnings per share, and return on common stockholders’ equity. (Round earning per share to 2 decimal places, e.g. $2.66 and all other answers to 1 decimal place. 17.5%.)