Question

Statement of Shareholders' Equity

On January 1, 2019, Osgood Film Studios reported the following alphabetical list of shareholders' equity items:

Additional paid-in capital on common stock	$171,700
Additional paid-in capital on preferred stock	17,800
Common stock, $2 par	80,800
Preferred stock, $100 par	89,000
Retained earnings	200,000

During 2019, the company sold 3,200 shares of common stock for $10 per share and 250 shares of preferred stock for $123 per share. It also earned income of $96,000 and paid dividends of $8 per share on the preferred stock and $1.20 per share on the common stock outstanding at the end of 2019.

Required:

Prepare Osgood's statement of shareholders' equity (include retained earnings) for 2019.

Answer 1

Common stock = 80800 + 3200 *2 = 87200

Additional paid in capital common stock = 171700 + 3200 * (10 -2) = 197300

Preferred stock = 89000 + 250 * 100 = 114000

Additional paid in capital preferred stock = 17800 + 250 * (123-100) = 23550

Retained earnings = Opening balance + Net Income - Preferred dividend - common stock dividend

Preferred dividend = 8 * (114000 / 100) = 9120

Common stock dividend = 1.20 * (87200 /2) = 52320

Retained earning ending balance = 200000 + 96000 - 9120 - 52320 = 234560

Statement of stockholder equity
Common stock $2 par	87200.00
Additional paid in capital common stock	197300.00
Preferred stock $100 par	114000.00
Additional paid in capital preferred stock	23550.00
Retained earnings	234560.00
Stockholders equity	656610.00