Log out Go to App
Go to App

Learning Materials

Features

Discover

Chapter 15: Question 3BE (page 811)

Wilco Corporation has the following account balances at December 31, 2017.

Common stock, \(5 par value \) 510,000

Treasury stock 90,000

Retained earnings 2,340,000

Paid-in capital in excess of par—common stock 1,320,000

Prepare Wilco’s December 31, 2017, stockholders’ equity section.

Short Answer

Expert verified

The total stockholders’ equity of Wilco on December 31, 2017, is $4,080,000.

Step by step solution

01

Meaning of Stockholders’ equity

In simple words, company net worth (or shareholders' equity) measures the amount of money that the owners of the company invested into the business.

02

Preparing Wilco’s Stockholders’ Equity.

WILCO CORPORATION

Stockholders’ equity

December 31, 2017


Common stock, $5 par value

$ 510,000

Paid-in capital in excess

of par-common stock

1,320,000

Total paid-in capital

1,830,000

Retained earnings

2,340,000

4,170,000

Less: Treasury stock

90,000

Total stockholders’ equity

4,080,000

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Start your free trial

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

(Dividends and Splits) Myers Company provides you with the following condensed balance sheet information.

Asset

Current assets \(40,000

Equipment (net) 250,000

Intangibles 60,000

Total assets \)410,000

Liabilities and Stockholders’ Equity

Current and long-term liabilities \(100,000

Stockholders’ equity

Common stock (\)5 par) \( 20,000

Paid-in capital in excess of par 110,000

Retained earnings 180,000 310,000

Total liabilities and stockholders’ equity \)410,000

Instructions

For each of the following transactions, indicate the dollar impact (if any) on the following five items: (1) total assets, (2) common stock, (3) paid-in capital in excess of par, (4) retained earnings, and (5) stockholders’ equity. (Each situation is independent.)

  1. Myers declares and pays a \(0.50 per share cash dividend.
  2. Myers declares and issues a 10% stock dividend when the market price of the stock is \)14 per share.
  3. Myers declares and issues a 30% stock dividend when the market price of the stock is \(15 per share.
  4. Myers declares and distributes a property dividend. Myers gives one share of its equity investment (ABC stock) for every two shares of Myers Company stock held. Myers owns 10,000 shares of ABC. ABC is selling for \)10 per share on the date the property dividend is declared.
  5. Myers declares a 2-for-1 stock split and issues new shares.

What factors influence the dividend policy of a company?

What features or rights may alter the character of preferred stock?

This comment appeared in the annual report of MacCloud Inc.: “The Company could pay cash or property dividends on the Class A common stock without paying cash or property dividends on the Class B common stock. But if the Company pays any cash or property dividends on the Class B common stock, it would be required to pay at least the same dividend on the Class A common stock.” How is a property dividend accounted for in the financial records?

Where can authoritative IFRS guidance related to stockholders’ equity be found?
See all solutions

Recommended explanations on Business Studies Textbooks

Financial Performance

Read Explanation

Intermediate Accounting

Read Explanation

Strategic Analysis

Read Explanation

Influences On Business

Read Explanation

Organizational Behavior

Read Explanation

Nature of Business

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free