Analyze and record stock transactions and prepare equity section of balance sheet

The following information pertains to the equity accounts of Bottling Company:

a. Contributed capital on January 1, 2010, consisted of 80,000 issued and outstanding shares of common stock with par value of $1; additional paid-in-capital in excess of par of $480,000; and retained earnings of $560,000.

b. During the first quarter of 2010, Bottling Company issued an additional 5,000 shares of common stock for $7 per share.

C. on july 15, the company declared a 3-for-1 stock split

d. on october 15, the company declared and distributed a 5% stock dividend. The market price of the stock on that date was $8 per share.

e. on November 1, the company declared a dividend of $0.90 per shareto be paid on November 15.

f. Near the end of the year, the company’s CEO decided the comapny should buy 1,000 shares of its own stock. At that time, the stock was trading for $9 per share in the stock market.

g. Net income for 2010 was $75,500

 

Requirements

show how each of the transactions would affect the accounting equation

prepare the shareholders equity section of the balance sheet at Dec 31, 2010

Sheet1

–

A

5

7

8

Amount

Amount

Amount

$ – 0

																																												Problem	8	5	7	A	Name
Section
B	C	D	E	F	G	H	I
Part 2 only
6
Shareholders’ equity section for the Bottling Company
9
10
11	Common stock, ($.33 par, 267,750 shares issued)				Amount
12	Additional paid-in capital (CS)
13	Total Contributed Capital		$ – 0
14
15	Retained earnings
16	Less: Treasury shares (1,000 shares at cost)
17	Total Shareholders’ Equity
18
19
20
End of Problem

&LReimers, Financial Accounting 3e
CyberCoach:
Enter as a negative number

Sheet2

Sheet3