AFM101 Study Guide - Authorised Capital, Retained Earnings

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM101
• Professor: Robert Ducharme

Document Summary

The december 31, 2013, shareholders" equity section of the statement of financial position of velor inc. appears below. All the shares were issued on january 1, 2011 (when the corporation began operations). No dividends had been declared during the first two years of operations (2011 and 2012). During 2013, the cash dividends declared and paid totalled ,000. (a) calculate the amount of cash dividends paid during 2013 to each of the three classes of shares. The dividends paid to cumulative preferred shareholders should be ,000, but you have not entered this. The dividends paid to non-cumulative preferred shareholders should be ,000, but you have not entered this. The dividends paid to common shareholders should be ,000, but you have not entered this. This will cost you 1 mark. (b) assuming profit earned during 2013 was ,275,000, determine the december 31, 2012, balance in retained earnings. Dec 2013 retained earnings = dec 2012 retained earnings + profit - dividends.