The shareholders equity section of Rudnicki Corporation contained the following balances as of December 31, 2011:Preferred stock (10% $10 par value, cumulative) …….. $1000Preferred stock (12%, $10 par value, noncumulative) …… 1500Common stock ($1 par value, 5,000 shares authorized3,500 issued and 400 held in treasury) ………. 3500Additional paid-in capital:Preferred stock (10%) ……………….. 1050Preferred stock (12%) ……………….. 1275Common stock …………………. 2345Retained earnings ……………….. 4256Less: Treasury stock ………………. (5750)Total shareholders equity ……………… $9175During 2012, Rudnicki Corporation entered into the following transactions affecting shareholders’ equity:1. On May 3, the company repurchased 50 shares of its common stock in the on market at $20 per share.2. On September 26, the company issued 200 shares of its 10 percent preferred stock at $19 per share.3. On October 19, the company reissued 30 shares of the stock held in treasury. They sold for $22 per share; all of the shares reissued were purchased prior to May 13 for $12 per share.4. On December 2, the company declared a cash dividend of $750, which was paid on December 27. The company has not declared a dividend since 2010. (Rudnicki Corporation uses a separate dividend account for each type of stock.)5. On December 27, the company pays the dividend declared on December 26. On December 29, the company declares a 2:1 stock split on the company’s common stock.Required(a) Prepare the necessary entries for each transaction.(b) Assume that Rudnicki Corporation earned net income of $899 during 2012. Prepare shareholders’ equity section as of December 31, 2012.View Solution:
The shareholders equity section of Rudnicki Corporation containe



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