Question

Changes in Shareholders' Equity On January 1, 2016, the Osgood Film Studios reported the following alphabetical list of shareholders' equity items: Additional paid-in capital on common stock $158,950 Additional paid-in capital on preferred stock 19,400 Common stock, $2 par 74,800 Preferred stock, $100 par 97,000 Retained earnings 238,000

During 2016, the company sold 2,700 shares of common stock for $14 per share and 250 shares of preferred stock for $129 per share. It also earned income of $81,000 and paid dividends of $10 per share on the preferred stock and $2.90 per share on the common stock outstanding at the end of 2016. Required: Prepare Osgood's statement of shareholders' equity (include retained earnings) for 2016.

Preferred
Stock
$100 parCommon Stock $2 parAdditional
Paid-in Capital
on Preferred StockAdditional
Paid-in Capital
on Common StockRetained

Earnings

TotalBalances, 1/1/16 $$$$$$Common stock issued Preferred stock issued Net income Cash dividend paid on preferred Cash dividend paid on common Balances, 12/31/16 $$$$$$

Answer 1

**Stockholders equity = preferred stock +common stock +Paid in capital-preferred +paid in capital -common +retained earning

= 97000+74800+19400+158950+238000

= 588150

**Preferred shares outstanding on date of dividend = 970beginning+250= 1220             [97000/100]

**common shares outstanding on date of dividend = 37400 beginning +2700= 40100    [74800/2]

		Stockholders equity
TotalBalances, 1/1/16		588150
Common stock issued	37800    [ 2700*14]
Preferred stock issued	32250    [250*129]
Net Income	81000
cash dividend paid on preferred	(12200)
Cash dividend paid on common Balances	(116290)      [40100*2.9]
		22560
stockholders equity 12/31/16		610710