Q1) On January 1, 2007, Frederiksen Inc. Stockhlders Equity category appeared as follows:
Preferred stock, $80 par value, 7%
|
|
3000 shares issues and outstanding
|
$240,000
|
Common stock, $10 par value,
|
|
15,000 shares issued and outstanding
|
150,000
|
Additional paid-in capital-Preferred
|
60,000
|
Additional paid-in capital-Common
|
225,000
|
Total contributed capital
|
$675,000
|
Retained earnings
|
2,100,000
|
Total stockholders' equity
|
$2,775,000
|
Preferred stock is noncumulative and nonparticipating. In 2007, following transactions occurred:
a) On March 1, declared cash dividend of $16,800 on preferred stock. Paid dividend on April 1.
b) On June 1, declared 5% stock dividend on common stock. Current market price of common stock was $18. Stock was issued on July 1.
c) On September 1, declared cash dividend of $0.50 per share on common stock; paid dividend on October 1.
d) On December 1, issued a 2-for-1 stock split of common stock, when stock was selling at $50 per share.
problem:
Describe each transaction effect on stockholders equity accounts and total stockholders equity.