ACCT 2101 Lecture Notes - Lecture 11: Retained Earnings
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Fechter Corporation had the following stockholders’ equity accounts on January 1, 2017: Common Stock ($5 par) $500,000, Paid-in Capital in Excess of Par—Common Stock $200,000, and Retained Earnings $100,000. In 2017, the company had the following treasury stock transactions.
Mar. | 1 | Purchased 5,000 shares at $8 per share. | |
June | 1 | Sold 1,000 shares at $12 per share. | |
Sept. | 1 | Sold 2,000 shares at $10 per share. | |
Dec. | 1 | Sold 1,000 shares at $7 per share. |
Fechter Corporation uses the cost method of accounting for treasury stock. In 2017, the company reported net income of $30,000.
C. Prepare the stockholder's equity section for Fechter Corporation at December 31, 2017. (Total stockholders' equity should be $829,000).
Accounting Equation
The total assets and total liabilities of Pat's Coffee & TeaInc. and Pam's Corporation are shown below.
Pat's Coffee & Tea Inc. (in millions) | Pam's Corporation (in millions) | |||||||
Assets | $41,677 | $40,427 | ||||||
Liabilities | 18,338 | 19,405 |
Determine the stockholders' equity of each company.
Pat's Coffee & Tea Inc. stockholders' equity | $ ______ |
Pam's Corporation stockholders' equity | $ ______ |
Go44 is a motivational consulting business. At the end of itsaccounting period, December 31, 2015, Go44 has assets of $720,000and liabilities of $180,000. Using the accounting equation andconsidering each case independently, determine the followingamounts:
a. Stockholders' equity as of December 31,2015.
$
b. Stockholders' equity as of December 31,2016, assuming that assets increased by $96,500 and liabilitiesincreased by $30,000 during 2016.
$
c. Stockholders' equity as of December 31,2016, assuming that assets decreased by $168,000 and liabilitiesincreased by $15,000 during 2016.
$
d. Stockholders' equity as of December 31,2016, assuming that assets increased by $175,000 and liabilitiesdecreased by $18,000 during 2016.
$
e. Net income (or net loss) during 2016,assuming that as of December 31, 2016, assets were $880,000,liabilities were $220,000, and no additional common stock wasissued or dividends paid.
$