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Chapter 15: Question 13Q (page 810)
Where in the financial statements is preferred stock normally reported?
The equity section of the balance sheet.
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In the absence of restrictive provisions, what are the basic rights of stockholders of a corporation?
Distinguish among: cash dividends, property dividends, liquidating dividends, and stock dividends.
Describe the accounting for the issuance for cash of no-par value common stock at a price in excess of the stated value of the common stock.
How are restrictions of retained earnings reported?
Teller Corporation’s post-closing trial balance at December 31, 2017, was as follows.
TELLER CORPORATION POST-CLOSING TRIAL BALANCE DECEMBER 31, 2017 | ||
Dr. | Cr. | |
Accounts payable | \( 310,000 | |
Accounts receivable | \) 480,000 | |
Accumulated depreciation—building and equipment | 185,000 | |
Allowance for doubtful accounts | 30,000 | |
Bonds payable | 700,000 | |
Building and equipment | 1,450,000 | |
Cash | 190,000 | |
Dividends payable on preference shares—cash | 4,000 | |
Inventories | 560,000 | |
Land | 400,000 | |
Prepaid expenses | 40,000 | |
Retained earnings | 201,000 | |
Share capital—ordinary (\(1 par value) | 200,000 | |
Share capital—preference (\)50 par value) | 500,000 | |
Share premium—ordinary | 1,000,000 | |
Share premium—treasury | 160,000 | |
Treasury shares—ordinary at cost | 170,000 |
|
Totals | \(3,290,000 | \)3,290,000 |
On December 31, 2017, Teller had the following number of ordinary and preference shares.
Ordinary | Preference | |
Authorized | 600,000 | 60,000 |
Issued | 200,000 | 10,000 |
Outstanding | 190,000 | 10,000 |
The dividends on preference shares are \(4 cumulative. In addition, the preference shares have a preference in the liquidation of \)50 per share.
Instructions
Prepare the equity section of Teller’s statement of financial position at December 31, 2017.
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