Question

The following table presents the long-term liabilities and stockholders’ equity of Information Control Corp. one year ago: Long-term debt $ 66,600,000 Preferred stock 4,160,000 Common stock ($1 par value) 16,600,000 Capital surplus 46,600,000 Accumulated retained earnings 136,600,000 During the past year, the company issued 11.6 million shares of new stock at a total price of $61.2 million, and issued $36.6 million in new long-term debt. The company generated $12.2 million in net income and paid $3.6 million in dividends. Prepare the current balance sheet reflecting the changes that occurred at the company during the year. (Do not round intermediate calculations. Enter your answers in dollars, not millions of dollars, e.g., 1,234,567.)

Answer 1

Information Control Corp.
Current Balance Sheet
Long-term debt (66.6+36.6)	103200000
Total long-term debt	103200000
Shareholders equity
Preferred stock	4,160,000
Common stock (16.6+11.6)	28200000
Capital surplus (46.6+49.6)	96200000
Accumulated retained earnings(136.6+8.6)	145,200,000
Total equity	273,760,000
Total Liabilities & Equity	376,960,000

Working notes for the above answer:

1

During the past year, the company issued 11.6 million shares of new stock at a total price of $61.2 million

So addition in the common stock=11.6 million x $1 per share =$11.6 million

addition in the capital surplus =(61.2-11.6) =$49.6 million

2

addition in the long-term debt = $36.6 million

3

Addition to retained earnings = net income – dividend =12.2-3.6=