The shareholders' equity section of Blossom Inc. at the beginning of the current year is as follows: Common shares, 1,000,000 shares authorized, 300,000 shares issued and outstanding Retained earnings During the current year, the following transactions occurred. $3,600,000 571,200 1. The company issued 100,000 rights to the shareholders. Ten rights are needed to buy one share at $34 and the rights are void after 30 days. The shares' market price at this time was $36 per share. 2. 3. 4. 5. 6. The company sold the public a $208,000, 10% bond issue at par. The company also issued with each $100 bond one detachable stock purchase warrant, which provided for the purchase of common shares at $30 per share. Shortly after issuance, similar bonds without warrants were selling at 96 and the warrants at $8. All but 10,000 of the rights issued in item 1 were exercised in 30 days. At the end of the year, 80% of the warrants in item 2 had been exercised, and the remaining were outstanding and in good standing. During the current year, the company granted stock options for 5,000 common shares to company executives. The company, using an options pricing model, determined that each option is worth $10. The exercise or strike price is $30. The options were to expire at year-end and were considered compensation for the current year. All but 1,000 shares related to the stock option plan were exercised by year-end. The expiration resulted because one of the executives failed to fulfill an obligation related to the employment contract. Prepare the shareholders' equity section of the SFP at the end of the current year. Assume that retained earnings at the end of the current year is $750,000. (Enter account name only and do not provide descriptive information.)
The shareholders' equity section of Blossom Inc. at the beginning of the current year is as follows: Common shares, 1,000,000 shares authorized, 300,000 shares issued and outstanding Retained earnings During the current year, the following transactions occurred. $3,600,000 571,200 1. The company issued 100,000 rights to the shareholders. Ten rights are needed to buy one share at $34 and the rights are void after 30 days. The shares' market price at this time was $36 per share. 2. 3. 4. 5. 6. The company sold the public a $208,000, 10% bond issue at par. The company also issued with each $100 bond one detachable stock purchase warrant, which provided for the purchase of common shares at $30 per share. Shortly after issuance, similar bonds without warrants were selling at 96 and the warrants at $8. All but 10,000 of the rights issued in item 1 were exercised in 30 days. At the end of the year, 80% of the warrants in item 2 had been exercised, and the remaining were outstanding and in good standing. During the current year, the company granted stock options for 5,000 common shares to company executives. The company, using an options pricing model, determined that each option is worth $10. The exercise or strike price is $30. The options were to expire at year-end and were considered compensation for the current year. All but 1,000 shares related to the stock option plan were exercised by year-end. The expiration resulted because one of the executives failed to fulfill an obligation related to the employment contract. Prepare the shareholders' equity section of the SFP at the end of the current year. Assume that retained earnings at the end of the current year is $750,000. (Enter account name only and do not provide descriptive information.)
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter16: Retained Earnings And Earnings Per Share
Section: Chapter Questions
Problem 5MC: Kent Corporation was organized on January 1, 2014. On that date, it issued 200,000 shares of 10 par...
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Transcribed Image Text:The shareholders' equity section of Blossom Inc. at the beginning of the current year is as follows:
Common shares, 1,000,000 shares authorized, 300,000 shares issued and outstanding
Retained earnings
During the current year, the following transactions occurred.
$3,600,000
571,200
1.
The company issued 100,000 rights to the shareholders. Ten rights are needed to buy one share at $34 and the
rights are void after 30 days. The shares' market price at this time was $36 per share.
2.
3.
4.
5.
6.
The company sold the public a $208,000, 10% bond issue at par. The company also issued with each $100 bond
one detachable stock purchase warrant, which provided for the purchase of common shares at $30 per share.
Shortly after issuance, similar bonds without warrants were selling at 96 and the warrants at $8.
All but 10,000 of the rights issued in item 1 were exercised in 30 days.
At the end of the year, 80% of the warrants in item 2 had been exercised, and the remaining were outstanding
and in good standing.
During the current year, the company granted stock options for 5,000 common shares to company executives.
The company, using an options pricing model, determined that each option is worth $10. The exercise or strike
price is $30. The options were to expire at year-end and were considered compensation for the current year.
All but 1,000 shares related to the stock option plan were exercised by year-end. The expiration resulted because
one of the executives failed to fulfill an obligation related to the employment contract.
Prepare the shareholders' equity section of the SFP at the end of the current year. Assume that retained earnings at the
end of the current year is $750,000. (Enter account name only and do not provide descriptive information.)
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