The stockholders' equity of DiFrancesco Company at March 31, 2019 is shown below. 496 preferred stock, $1,000 par value, 25,000 shares authorized; 10,000 shares issued and outstanding $10,000,000 Common stock, $1 par value, 3,000,000 shares authorized; 700,000 shares issued and outstanding 700,000 60,000 Additional paid-in capital-preferred stock Additional paid-in capital-common stock Retained earnings Total stockholders' equity The following transactions, among others, occurred during the fiscal year ended March 31, 2020. April 15, 2019 Declare and pay preferred dividends of $460,000. April 15, 2019 Declare and pay common dividends of $1.70 per share. October 1, 2019 Execute a 3-for-1 stock split of the common stock when the stock price was $161 per share. March 1, 2020 Declare and pay common dividends of $0.90 per share. (a) Use the financial statement effects template to indicate the effects of these separate transactions. Note: Use negative signs with answers, when appropriate. Balance Sheet Liabilities Transaction Apr. 15 Apr. 15 Oct. 1 Mar. 1 Cash Asset (460,000)✓ (1,190,000)✓ 0✓ 0x + Noncash Assets 0✓ 0✔ 0✓ 0✓ 0✔ 0✔ 0 ✓ 0✓ 17,150,000 56,356,542 $84,266,542 + Contributed Capital 0✓ 0✓ 0✔ 0✓ Earned Capital (460,000) ✔ (1,190,000)✓ 0✓ 0x Revenue 0✓ 0 ✓ 0✓ 0✔ Income Statement Expenses 460,000 x 0✔ 0✓ 0✓ Net Income (460,000) * 0✔ 0✔ 0 (b) At March 31, 2020, the company reported net income for the year of $8,900,610. Compute retained earnings as of March 31, 2020. $0 x
The stockholders' equity of DiFrancesco Company at March 31, 2019 is shown below. 496 preferred stock, $1,000 par value, 25,000 shares authorized; 10,000 shares issued and outstanding $10,000,000 Common stock, $1 par value, 3,000,000 shares authorized; 700,000 shares issued and outstanding 700,000 60,000 Additional paid-in capital-preferred stock Additional paid-in capital-common stock Retained earnings Total stockholders' equity The following transactions, among others, occurred during the fiscal year ended March 31, 2020. April 15, 2019 Declare and pay preferred dividends of $460,000. April 15, 2019 Declare and pay common dividends of $1.70 per share. October 1, 2019 Execute a 3-for-1 stock split of the common stock when the stock price was $161 per share. March 1, 2020 Declare and pay common dividends of $0.90 per share. (a) Use the financial statement effects template to indicate the effects of these separate transactions. Note: Use negative signs with answers, when appropriate. Balance Sheet Liabilities Transaction Apr. 15 Apr. 15 Oct. 1 Mar. 1 Cash Asset (460,000)✓ (1,190,000)✓ 0✓ 0x + Noncash Assets 0✓ 0✔ 0✓ 0✓ 0✔ 0✔ 0 ✓ 0✓ 17,150,000 56,356,542 $84,266,542 + Contributed Capital 0✓ 0✓ 0✔ 0✓ Earned Capital (460,000) ✔ (1,190,000)✓ 0✓ 0x Revenue 0✓ 0 ✓ 0✓ 0✔ Income Statement Expenses 460,000 x 0✔ 0✓ 0✓ Net Income (460,000) * 0✔ 0✔ 0 (b) At March 31, 2020, the company reported net income for the year of $8,900,610. Compute retained earnings as of March 31, 2020. $0 x
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter10: Stockholder's Equity
Section: Chapter Questions
Problem 67E: Cash Dividends on Common and Preferred Stock Lemon Inc. has the following information regarding its...
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Transcribed Image Text:Identifying and Analyzing Financial Statement Effects of Dividends
The stockholders' equity of DiFrancesco Company at March 31, 2019 is shown below.
4% preferred stock, $1,000 par value, 25,000 shares authorized; 10,000 shares issued and outstanding $10,000,000
Common stock, $1 par value, 3,000,000 shares authorized; 700,000 shares issued and outstanding
700,000
Additional paid-in capital-preferred stock
60,000
Additional paid-in capital-common stock
Retained earnings
Total stockholders' equity
The following transactions, among others, occurred during the fiscal year ended March 31, 2020.
April 15, 2019 Declare and pay preferred dividends of $460,000.
April 15, 2019 Declare and pay common dividends of $1.70 per share.
October 1, 2019 Execute a 3-for-1 stock split of the common stock when the stock price was $161 per share.
March 1, 2020 Declare and pay common dividends of $0.90 per share.
(a) Use the financial statement effects template to indicate the effects of these separate transactions.
Note: Use negative signs with answers, when appropriate.
Balance Sheet
= Liabilities
Transaction
Apr. 15
Apr. 15
Oct. 1
Mar. 1
Cash
Asset
(460,000)
(1,190,000) ✔
0✔
0 x
+ Noncash
Assets
0
0 ✓
0✓
0 ✓
0
0✔
0✔
0 ✓
17,150,000
56,356,542
$84,266,542
+ Contributed +
Capital
0✓
0 ✓
0 ✓
0 ✓
Earned
Capital
(460,000)
(1,190,000)✓
0✔
0 x
Revenue
0✔
0✔
0✔
0 ✓
Income Statement
Expenses
460,000 *
0 ✓
0 ✓
0 ✓
Net
Income
(460,000) *
0✔
0✔
0✓
(b) At March 31, 2020, the company reported net income for the year of $8,900,610. Compute retained earnings as of March 31, 2020.
$0
x
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