Week 4 Learning Team Collaborative Discussion: Stockholders’ Equity Section of the Balance Sheet Discuss with your...

Week 4 Learning Team Collaborative Discussion: Stockholders’ Equity Section of the Balance Sheet

Discuss with your collaborative group how to become familiar with examining the stockholders' equity section of the balance sheet.

Solutions

Expert Solution

The Balance Sheet: Stockholders' Equity

Preferred stock, common stock, additional paid‐in‐capital, retained earnings, and treasury stock are all reported on the balance sheet in the stockholders' equity section. Information regarding the par value, authorized shares, issued shares, and outstanding shares must be disclosed for each type of stock. If a company has preferred stock, it is listed first in the stockholders' equity section due to its preference in dividends and during liquidation.Book value measures the value of one share of common stock based on amounts used in financial reporting. To calculate book value, divide total common stockholders' equity by the average number of common shares outstanding.If preferred stock exists, the preferred stockholders' equity is deducted from total stockholders' equity to determine the total common stockholders' equity. The preferred stockholders' equity is the call price for the preferred stock plus any cumulative dividends in arrears. The par value is used if the preferred stock does not have a call price.

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Analysis of Stockholders' Equity The Stockholders' Equity section of the December 31, 2017, balance sheet of...

Analysis of Stockholders' Equity The Stockholders' Equity section of the December 31, 2017, balance sheet of Eldon Company appeared as follows: Preferred stock, $40 par value, 5,000 shares authorized, ? shares issued $200,000 Common stock, ? par, 10,000 shares authorized, 10,000 shares issued 100,000 Additional paid-in capital—Preferred 9,000 Additional paid-in capital—Common 800,000 Additional paid-in capital—Treasury stock 2,000 Total contributed capital $1,111,000 Retained earnings 39,000 Treasury stock, preferred, 100 shares (3,300) Total stockholders’ equity $ ? Required: Determine the following items...

Stockholders' Equity: Transactions and Statement The stockholders' equity section of Night Corporation's balance sheet at January...

Stockholders' Equity: Transactions and Statement The stockholders' equity section of Night Corporation's balance sheet at January 1 follows: Common stock, $10 par value, 300,000 shares authorized, 60,000 shares 600,000 issued, 6,000 shares in treasury Additional paid-in capital In excess of par value 960,000 From treasury stock 60,000 1,020,000 Retained earnings 696,000 2,316,000 Less: Treasury stock (6,000 shares) at cost 276,000 Total Stockholdersâ€™ Equity 2,040,000 The following transactions affecting stockholdersâ€™ equity occurred during the year: Jan. 8 Issued 15,000 shares of...

Stockholders’ Equity: Transactions and Statement The stockholders’ equity section of Night Corporation’s balance sheet at January...

Stockholders’ Equity: Transactions and Statement The stockholders’ equity section of Night Corporation’s balance sheet at January 1 follows: Common stock, $5 par value, 300,000 shares authorized, 60,000 shares $300,000 issued, 6,000 shares in treasury Additional paid-in capital In excess of par value $480,000 From treasury stock 30,000 510,000 Retained earnings 348,000 1,158,000 Less: Treasury stock (6,000 shares) at cost 138,000 Total Stockholders’ Equity $1,020,000 The following transactions affecting stockholders’ equity occurred during the year: Jan. 8 Issued 15,000 shares of...

Stockholders' Equity: Transactions and Statement The stockholders' equity section of Night Corporation's balance sheet at January...

Stockholders' Equity: Transactions and Statement The stockholders' equity section of Night Corporation's balance sheet at January 1 follows: Common stock, $8 par value, 300,000 shares authorized, 60,000 shares 480,000 issued, 6,000 shares in treasury Additional paid-in capital In excess of par value 720,000 From treasury stock 45,000 765,000 Retained earnings 522,000 1,767,000 Less: Treasury stock (6,000 shares) at cost 207,000 Total Stockholdersâ€™ Equity 1,560,000 The following transactions affecting stockholdersâ€™ equity occurred during the year: Jan. 8 Issued 15,000 shares of...

Which of the following is true about stockholders' equity? a This section of the Balance Sheet...

Which of the following is true about stockholders' equity? a This section of the Balance Sheet will always equal total assets. b This section of the Balance Sheet can only be increased if the company sells more stock to its stockholders. c Corporations always must have at least two accounts in this section of the Balance Sheet: common stock and retained earnings. d Retained earnings in stockholders equity is the one account on the Balance Sheet that the ending balance...

list the errors the following stockholders equity section of the balance sheet prepared as of the...

list the errors the following stockholders equity section of the balance sheet prepared as of the end of the current year: paid in capital: preferred 2% stock,$80 par(125,000 shares authorized and issued $10,000,000 excess of issue price over par 500,000-10,500,000 retaining earnings $96,700,000 treasury stock(75,000 shares to cost)-1,755,000 dividends payable 430,000 total paid in capital $109,385,000 common stock $20 par (1,000,000 shares authorized, 825,000 shares issued - $17,655,000 organizing costs 300,000 total stockholders equity $127,340,000

How is the Stockholders' Equity section of a corporate balance sheet different from that in a...

How is the Stockholders' Equity section of a corporate balance sheet different from that in a single-owner business?

Problem#4 The stockholders equity section of Carey Co.'s balance sheet at December 31, 2014, was as...

Problem#4 The stockholders equity section of Carey Co.'s balance sheet at December 31, 2014, was as follows: Common stock--$10 par (authorized 1,000,000 shares, issued and outstanding 600,000 shares) $6,000,000 Paid-in capital in excess of par $1,500,000 Retained earnings $3,250,000 Total $10,750,000 Instructions: Prepare journal entries (1, 2 and 4) and show proper disclosure (3) (stockholders equity section of b/s) to reflect the following treasury stock transactions showing how each is accounted for under the...

The stockholders’ equity section on the December 31, 2014, balance sheet of American Corporation follows: Stockholders’...

The stockholders’ equity section on the December 31, 2014, balance sheet of American Corporation follows: Stockholders’ Equity Contributed capital Preferred stock (par $21; authorized 17,000 shares, ? issued, of which 700 shares are held as treasury stock) $ 126,000 Common stock (no-par; authorized 24,000 shares, issued and outstanding 9,000 shares) 801,000 Contributed capital (includes $3,000 from treasury stock transactions) 15,000 Retained earnings 48,000 Cost of treasury stock, preferred (16,800 ) Required: 1. Calculate the number of shares of preferred stock...

A portion of the stockholders’ equity section from the balance sheet of Walland Corporation appears as...

A portion of the stockholders’ equity section from the balance sheet of Walland Corporation appears as follows. Notice that the company has two classes of preferred stock with different features, in addition to common stock. Stockholders' equity: Preferred stock, 8% cumulative, $50 par, 40,000 shares authorized, issued, and outstanding $ 2,000,000 Preferred stock, 12% noncumulative, $100 par, 8,000 shares authorized, issued, and outstanding 800,000 Common stock, $5 par, 400,000 shares authorized, issued, and outstanding 2,000,000 Total paid-in capital $ 4,800,000...

Subjects