1. Listed below are six events involving a corporation's stockholders' equity. Insert the words "increase," "decrease," or "no effect" under the appropriate column heading to indicate the event's effect on total paid-in capital, retained earnings, and total stockholders' equity.
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Total Paid-In Capital
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Retained Earnings
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Total Stockholders' Equity
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(1)
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Issued 5,000 shares of common stock for cash at a price higher than par value.
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(2)
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Split common stock 2 for 1.
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(3)
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Purchased 1,000 shares of own common stock for treasury.
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(4)
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Issued 500 shares of preferred stock in exchange for new equipment.
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(5)
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Sold 400 shares of treasury common stock at a price higher than the shares' reacquisition cost.
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(6)
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Issued 800 shares of common stock for land whose fair value equaled the par value of the shares issued.
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2. Harmon Helmets purchased equipment for $62,000 cash, sold equipment costing $36,000 with a book value of $22,000 at a loss, and declared dividends during 2013. No new notes payable were issued during the year. Financial data follows:
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Dec. 31, 2013
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Dec. 31, 2012
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Change
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2013
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Cash
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$44,600
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$43,000
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$1,600
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Sales revenue
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$850,000
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Accounts receivable
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31,200
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13,800
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17,400
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Cost of sales
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425,000
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Inventory
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28,000
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21,000
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7,000
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Salaries expense
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135,000
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Equipment
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180,000
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154,000
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21,000
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Depreciation expense
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18,000
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Accum. depreciation
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(46,000)
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(42,000)
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1,000
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Interest expense
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3,500
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Accounts payable
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25,400
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36,400
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(11,000)
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Loss on sale of equipment
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3,000
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Unearned revenue
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16,200
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21,200
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(5,000)
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Income taxes expense
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44,000
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Accrued salaries
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7,000
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8,800
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(1,800)
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Net income
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$221,500
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Taxes payable
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11,600
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8,000
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3,600
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Long-term notes pay.
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37,000
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55,000
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(18,000)
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Common stock
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90,000
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28,000
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62,000
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Retained earnings
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50,600
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32,400
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18,200
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Calculate cash flows from operations using the indirect method for 2013.
3. The following schedule of information relates to Page Products for the year, 2013:
Income statement data:
Sales $580,000
Depreciation expense 21,000
Net income 77,000
Cash receipts:
From issuance of common stock $44,000
From sale (at book value) of stock investment 28,000
Cash payments:
For purchase of land $124,000
To stockholders as dividends 22,000
To payoff notes payable 14,000
Change in working capital accounts:
Cash increase $5,000
Accounts receivable increase 6,000
Inventory decrease 3,000
Accounts payable decrease 4,000
Accrued liabilities increase 2,000
The cash balance was $22,000 at the beginning of 2013. In good form, prepare a 2013 statement of cash flows for Page Products using the indirect method.