Question

Accounting for Shareholders’ Equity Transactions

The shareholders’ equity section of the consolidated balance sheet of Perry Corporation appeared as follows at the beginning of the year.

Common stock, $1.00 par value			$ 100,000
Additional paid-in-capital			1,200,000
Convertible preferred stock, no par value			800,000
Retained deficit			(600,000)
Treasury stock			(250,000)
Sharholders' equity			$1,250,000

The following transactions occurred during the year:

1. Generated net income of $80,000.

2. Paid cash dividends of $220,000.

3. Issued a ten percent common stock dividend; the fair value of the stock was $10 per share at this time.

4. Declared and issued a 2-for-1 forward stock split.

5. Converted 10,000 shares of convertible preferred stock with a book value of $300,000 into 30,000 shares of common stock.

Prepare the shareholders’ equity section of the balance sheet of Perry Corporation at year-end.

Use negative signs with answers that reduce the balance and/or a Total that reduces the overall balance of the Shareholders' equity.

Transaction	Common Stock at Par	Additional Paid-in-Capital	Preferred Stock, No-Par	Retained Earnings	Treasury Stock
Beginning Balance	$ 100,000	$ 1,200,000	$ 800,000	$ (600,000)	$ (250,000)
1	Answer	Answer	Answer	Answer	Answer
2	Answer	Answer	Answer	Answer	Answer
3	Answer	Answer	Answer	Answer	Answer
4	Answer	Answer	Answer	Answer	Answer
5	Answer	Answer	Answer	Answer	Answer
Total	$ Answer	$ Answer	$ Answer	$ Answer	$ Answer

Answer 1

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