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    (A) Reproduce The Retained Earnings Account For 2012. Solution: Retained Earnings Account

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    Qasim Khan
    The document provides stockholders' equity accounts and related transactions for Violet Corporation and Saa Corporation during 2012. For Violet Corporation, it includes the retained earnings account, a retained earnings statement, and stockholders' equity section. For Saa Corporation, it provides the stockholders' equity section at various dates during the year based on transactions that occurred.

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    (A) Reproduce The Retained Earnings Account For 2012. Solution: Retained Earnings Account

    Uploaded by

    Qasim Khan
    55 views5 pages
    The document provides stockholders' equity accounts and related transactions for Violet Corporation and Saa Corporation during 2012. For Violet Corporation, it includes the retained earnings account, a retained earnings statement, and stockholders' equity section. For Saa Corporation, it provides the stockholders' equity section at various dates during the year based on transactions that occurred.

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    assignment 5

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    The document provides stockholders' equity accounts and related transactions for Violet Corporation and Saa Corporation during 2012. For Violet Corporation, it includes the retained earnings account, a retained earnings statement, and stockholders' equity section. For Saa Corporation, it provides the stockholders' equity section at various dates during the year based on transactions that occurred.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    55 views5 pages

    (A) Reproduce The Retained Earnings Account For 2012. Solution: Retained Earnings Account

    Uploaded by

    Qasim Khan
    The document provides stockholders' equity accounts and related transactions for Violet Corporation and Saa Corporation during 2012. For Violet Corporation, it includes the retained earnings account, a retained earnings statement, and stockholders' equity section. For Saa Corporation, it provides the stockholders' equity section at various dates during the year based on transactions that occurred.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    of 5

    P14-3A The post-closing trial balance of Violet Corporation at December 31, 2012, contains

    the following stockholders’ equity accounts.

    (a) Reproduce the Retained Earnings account for 2012.


    Solution:

    Retained Earnings account


    Sept. 1 Prior Per. Adj. 63,000 Jan. 1 Balance 1,170,000

    Oct. 1 Cash Dividend 250,000 Dec. 31 Net Income 585,000

    Dec. 31 Stock Dividend 400,000


    Dec. 31 Balance 1,042,000

    b) Prepare a retained earnings statement for 2012.


    Solution
    Violet Corporation
    Retained Earnings Statement
    For the Year Ended December 31, 2012

    Balance, January 1, as reported $1,170,000


    Correction of overstatement of 2007 net
    income because of understatement of
    depreciation (63,000)

    Balance, January 1, as adjusted 1,107,000

    Add: Net income 585,000


    1,692,000

    Less: Cash dividends $250,000


    Stock dividends 400,000 650,000
    Balance, December 31 $1,042,000

    c) Prepare a stockholders’ equity section at December 31, 2012.

    Solution
    Violet Corporation
    stockholders’ equity section
    For the Year Ended December 31, 2012

    Stockholders’ equity
    Paid-in capital
    Capital stock
    6% Preferred stock,
    $50 par value, cumulative,
    20,000 shares authorized,
    15,000 shares issued and
    Outstanding $ 750,000
    Common stock, $10 par value,
    500,000 shares authorized,
    250,000 shares issued and
    Outstanding $2,500,000
    Common stock dividends
    Distributable 250,000 2,750,000
    Total capital stock 3,500,000
    Additional paid-in capital
    In excess of par value preferred stock 250,000
    In excess of par value common stock 400,000
    Total additional paid-in capital 650,000
    Total paid-in capital 4,150,000
    Retained earnings 1,042,000
    Total stockholders’ equity $5,192,000
    (d) Compute the allocation of the cash dividend to preferred and common
    stock.
    Solution:
    15,000 X $3 = $45,000

    $585,000 – $45,000 = $2.25


    240,000

    (e) Compute the earnings per share of common stock using 240,000 as the weighted-
    average
    shares outstanding for the year.
    Solution:

    Total cash dividend $250,000


    Allocated to preferred stock
    Dividend in arrears—2007 $45,000
    (15,000 X $3)
    2008 dividend 45,000 90,000
    Remainder to common stock $160,000
    P14-4A On January 1, 2012, Saa Corporation had the following
    stockholders’ equity accounts. Common Stock (no par value, 90,000
    shares issued and outstanding) $1,400,000
    Retained Earnings 500,000.
    During the year, the following transactions occurred

    Prepare the stockholders’ equity section of the balance sheet at:


    (a) March 31
    Solution
    Saa Corporation
    Partial Balance Sheet
    March 31, 2012

    Stockholders’ equity
    Paid-in capital
    Capital stock
    Common stock, no-par value,
    90,000 shares issued and outstanding. $1,400,000
    Retained earnings 410,000
    Total stockholders’ equity $1,810,000

    (b) June 30,

    Solution
    Saa Corporation
    Partial Balance Sheet
    June 30, 2012

    Stockholders’ equity
    Paid-in capital
    Capital stock
    Common stock, no-par value,
    360,000 shares issued and outstanding. $1,400,000
    Retained earnings 410,000
    Total stockholders’ equity $1,810,000
    c) September 30,

    Solution:
    Saa Corporation
    Partial Balance Sheet
    September 30, 2012

    Stockholders’ equity
    Paid-in capital
    Capital stock
    Common stock, no-par value,
    378,000 shares issued and outstanding $1,634,000
    Retained earnings 176,000

    Total stockholders’ equity $1,810,000

    (c)December 31, 2012.


    Solution

    Saa Corporation
    Partial Balance Sheet
    December 31, 2012
    Stockholders’ equity
    Paid-in capital
    Capital stock
    Common stock, no-par value,
    378,000 shares issued and outstanding $1,634,000
    Retained earnings 337,000

    Total stockholders’ equity $1,971,000

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