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On January 1, 2016, Fascom had the following account balances in its shareholders' equity accounts.   Common...

On January 1, 2016, Fascom had the following account balances in its shareholders' equity accounts.
  Common stock, $1 par, 247,000 shares issued 247,000
  Paid-in capital - excess of par, common 494,000
  Paid-in capital - excess of par, preferred 165,000
  Preferred stock, $100 par, 16,500 shares outstanding 1,650,000
  Retained earnings 3,300,000
  Treasury stock, at cost, 4,700 shares 23,500

During 2016, Fascom Inc. had several transactions relating to common stock.
January 15:

Declared a property dividend of 100,000 shares of Slowdown Company (book value $11.3 per share, market value $9.65 per share).
February 17:

Distributed the property dividend.
April 10:

A 2-for-1 stock split was declared and distributed on outstanding common stock and effected in the form of a stock dividend. The market value of the stock was $4 on this date.
July 18:

Declared and distributed a 4% stock dividend on outstanding common stock. The market value is $5 per share.
December 1:

Declared a 50 cents per share cash dividend on the outstanding common shares.
December 20:

Paid the cash dividend.
Required:

Without preparing journal entries, prepare the shareholders' equity section of Fascom's balance sheet as of December 31, 2016. Assume net income is $470,000 for 2016.

Solutions

Expert Solution

Sharholder' Equity Amount
Preferred Stock 10000 Shares $100 Par 16,50,000.00
Common Stock ( Note-1)     5,08,684.00
Paid in Capital - Excess of Par, Preferred     1,65,000.00
Paid in Capital - Excess of Par, Common ( Note-2) 22,13,788.00
Retained Earning ( Note-3)        23,500.00
Treasury Stock at Cost 45,60,972.00
Total Shareholder Equity
Note-1:-( Common stock ( 247000)-4700 ( Treasru Stock))X2=484600 ShareX 1.04X1=$503984+(4700 Tresury Stock , $1)=$508684
Note-2: Paid in Capital Common+(Common shareX Stock Dividend)+ ( Market Value-Face Value)
:- $494000-((494000X4%)X($5-$1))= $414960
Note-3 : Retained Earning
Opening: 3300000
Less: Dividend (100000X9.65):-965000
Less: Stock Dividend (484600X4%X5):-96920
Less: Cash Dividend ($503984X50%): 251992
Less: 242300
Add; Net Income : 470000
Total : 2213788

ekkarill92 answered 2 years ago
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