I need help with this question. Pharma Shop Ltd. was a mid-sized public company
ID: 2520279 • Letter: I
Question
I need help with this question.
Pharma Shop Ltd. was a mid-sized public company that had been in operation for many years. On December 31, 2015, it had an unlimited number of common shares authorized and 5,040,000 shares issued at an average value of $24 per share. As well, there were 4,980,000 preferred shares authorized, with 248,500 of them issued at $19 per share. The balance in retained earnings was $26,617,500. The balance in accumulated other comprehensive income was $516,000. The preferred shares pay an annual dividend of $2 per share. During 2016, the following transactions affected shareholders’ equity:
? Cashflow state ex Q From a standard x·Cash Flow State ex Employee facing reg × . Course: AC O2 3c × Y? WileyPLUS Chegg Study i Gu + x https//edugen.wileyplus.com/edugen/lti/main.uni Seurch Burnley, Understanding Financial Accounting tHelp I System.Announcements BACK NEXT Application Problem 11-8 (Part Level Submission) harma Shop Ltd. was a mid-sized public company that had been in operation for many years. On December 31, 2015, it had an unlimited number of common shares authorized and 5,040,000 shares issue here were 4,980,000 preferred shares authorized, with 248,500 of them issued at $19 per share. The balance in retained eamings was $26,617,500. The balance in accumulated other comprehensive inco nnual dividend of $2 per share. During 2016, the following transactions affected shareholders' equity 1. In total, 180,000 new common shares were issued at $29 per share 2. The preferred dividend for the year was declared and paid. 3 A 10% common stock dividend was declared when the market price was $36 per share. The shares were distributed one month after the declaration 4. In early December 2016, a dividend of $1.60 per share was declared on the common shares. The date of record was December 15, 2014. The dividend will be paid the following year. 5. The company earned a net income of $14,383,000 and had an other comprehensive loss of $158,400 6. On December 31, 2016, the company declared a two-for-one stock split on common shares Use a spreadsheet or table format like the one in the first practice problem to track all of the changes in the shareholders' equity accounts in 2016. (Ifan amount reduces the account balance then ente parenthesis, e.g. (15,000).) Number of Number of preferred Shares Accur Preferred shares Retained Earnings Date shares Common Shares Dec 31, 2015 1. issued common shares 2. preferred share dividends 3. 10% stock dividend on common shares 04:18 p.m 13/04/2018 PürExplanation / Answer
Solution:
Changes in shareholder's Equity Accounts Date Nos of common shares Common Share Nos of Preferred Shares Preferred Shares Retained Earnings Accumulated other comprehensive income Total 31-Dec-15 5040000 $120,960,000.00 248500 $4,721,500.00 $26,617,500.00 $516,000.00 $152,815,000.00 1. Issued common shares 180000 $5,220,000.00 $5,220,000.00 2. Preferred shares dividend -$497,000.00 -$497,000.00 3. 10% stock dividend on common shares 522000 $18,792,000.00 -$18,792,000.00 $0.00 4. common share dividend -$9,187,200.00 -$9,187,200.00 5a. Net Income for the year $14,383,000.00 $14,383,000.00 5a. Other comprehensive loss for the year -$158,400.00 -$158,400.00 6. Two for one stock split on common shares 5742000 $0.00 31-Dec-16 11484000 $144,972,000.00 248500 $4,721,500.00 $12,524,300.00 $357,600.00 $162,575,400.00