On December 31, 2018, Fax Company Inc., had the following Shareholder Equity balances: Preferred Shares $400,000...

On December 31, 2018, Fax Company Inc., had the following Shareholder Equity balances:

Preferred Shares $400,000

Common Shares $750,000

Retained Earnings 1,200,000

Contributed Surplus 150,000

Accumulated Other Comprehensive Income 75,000

During 2019, the following took place:

Fax Company Inc earned net income of $175,000 and paid cash dividends in the amount of $45,000 on its common shares.

In addition, the company declared a cash dividend in the amount of $30,000 on its preferred shares.

Also during 2019, XYZ experienced an unrealized foreign exchange gain of $25,000 upon translation of its foreign subsidiary's results.

Required

In good form, prepare a Statement of Changes in Equity for Fax Company Inc. for 2019.

Expert Solution

Fax Company
Statement of changes in equity for the year ended 2019
	Common Shares	Preferred Shares	Share Premium	Retained Earnings	Other Components of Income	Total
Balance as on 01.Jan.2019	750,000	400,000	150,000	1,200,000	75,000	2,575,000
Transfer to retained earnings				175,000		175,000
Dividend on preferrence shares				(30,000)		(30,000)
Dividend on Common Shares				(45,000)		(45,000)
Gain on Foreign exchange					25,000	25,000
Balance at 31.Dec.2019	750,000	400,000	150,000	1,300,000	100,000	2,700,000

ekkarill92 answered 2 years ago

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