In: Accounting
The shareholders' equity accounts of Crane Inc. at December 31,
2020, are as follows:
Preferred shares, $3 noncumulative, unlimited number authorized, 2,000 issued | $200,000 | ||
Common shares, unlimited number authorized, 160,000 issued | 800,000 | ||
Retained earnings | 520,000 | ||
Accumulated other comprehensive loss | (54,000 | ) |
Crane has a 40% income tax rate. During the following fiscal year, ended December 31, 2021, the company had the following transactions and events: |
Feb. | 1 | Repurchased 10,000 common shares for $40,000. | ||
July | 12 | Announced a 2-for-1 preferred stock split. The market price of the preferred shares at the date of announcement was $150. | ||
Dec. | 1 | Declared the annual cash dividend ($1.50 post-split) to the preferred shareholders of record on January 10, 2022, payable on January 31, 2022. | ||
Dec. | 18 | Declared a 10% stock dividend to common shareholders of record at December 20, distributable on January 12, 2022. The fair value of the common shares was $10 per share. | ||
Dec. | 31 | Determined that for 2021, profit before income tax was $340,000 and other comprehensive income, net of income tax expense of $47,200, was $70,800. |
Prepare a statement of changes in shareholders’ equity for the year
ended December 31, 2021. (Enter negative amount using
either a negative sign preceding the number e.g. -45 or parentheses
e.g. (45).)
CRANE INC. Statement of Changes in Shareholders’ Equity |
Preferred Shares |
Common Shares |
Stock Dividend Distributable |
Contributed
Surplus Reacquisition of Common Shares |
Retained Earnings |
Accumulated Other Comprehensive Income (Loss) |
Total | ||||||||
Balance, January 1 | $ | $ | $ | $ | $ | $ | $ | |||||||
Reacquired common shares | ||||||||||||||
Stock split 2 for 1 | ||||||||||||||
Cash dividends—preferred | ||||||||||||||
Stock dividends—common | ||||||||||||||
Comprehensive income | ||||||||||||||
Balance, December 31 | $ |
Answer:
CRANE INC. | ||||||||
Statement of Changes in Shareholder's Equity | ||||||||
For the Year Ended December 31,2021 | ||||||||
Date | Preferred Shares | Common Shares | Stock Dividend Distributable | Contributed Surplus Reaacq. of Common Shares | Retained Earnings | Accumulated Other Company Income | Total | Explanation |
Balance, January 1 | $ 200,000 | $ 800,000 | $ 0 | $ 0 | $ 520,000 | $ - 54,000 | $ 1,466,000 | |
Reacquired Common Shares | $ 0 | $ 0 | $ 0 | $ -40,000 | $ 0 | $ 0 | $ -40,000 | |
Stock Split 2 for 1 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | (No Effect) |
Cash Dividends - Preferred | $ 0 | $ 0 | $ 0 | $ 0 | $ - 6,000 | $ 0 | $ - 6,000 | [4,000shares*1.50] |
Stock Dividends - Common | $ 0 | $ 0 | $ 0 | $ 0 | $ -150,000 | $ 0 | $ -150,000 | [160,000-10,000]shares *10% *$10each |
Comprehensive Income | $ 0 | $ 0 | $ 0 | $ 0 | $204,000 | $ 70,800 | $ 274,800 | [Add to Ret.Earnings=$340,000(1-40%)]=$204,000 |
Balance, December 31 | $ 200,000 | $ 800,000 | $ 0 | $ -40,000 | $ 568,000 | $ 16,800 | $ 1,544,800 |