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Examining the Statement of Stockholders Equity The following transactions of Victor
Chapter 21, Problem 21-4(choose chapter or problem)
Examining the Statement of Stockholders’ Equity
The following transactions of Victor Jewelry Corporation took place during the period.
Instructions Use the form in your working papers to indicate which of the transactions is reported on the statement of stockholders’ equity.
Transactions:
1. Paid accounts payable of $50,000.
2. Issued 2,000 shares of $10 par common stock, receiving $15 per share.
3. The board of directors declared a cash dividend of $12,000 for all common stockholders.
4. Bought equipment on account at a total cost of $125,000.
5. Paid the cash dividend declared in Transaction 3.
6. Issued 500 shares of $100 par, $7 preferred stock.
7. Paid the federal income tax installment of $5,000.
8. Earned a net income of $150,000 for the period.
Questions & Answers
QUESTION:
Examining the Statement of Stockholders’ Equity
The following transactions of Victor Jewelry Corporation took place during the period.
Instructions Use the form in your working papers to indicate which of the transactions is reported on the statement of stockholders’ equity.
Transactions:
1. Paid accounts payable of $50,000.
2. Issued 2,000 shares of $10 par common stock, receiving $15 per share.
3. The board of directors declared a cash dividend of $12,000 for all common stockholders.
4. Bought equipment on account at a total cost of $125,000.
5. Paid the cash dividend declared in Transaction 3.
6. Issued 500 shares of $100 par, $7 preferred stock.
7. Paid the federal income tax installment of $5,000.
8. Earned a net income of $150,000 for the period.
ANSWER:Step 1 of 2
The shareholders’ equity means the capital owned by the shareholders of the firm. It reflects the net worth of the company through the capital stock and retained earnings.