(Learning Objective 2, 3, 4: Accounting for changes in stockholders’ equity) Fun City, Inc., ended 20X5 with 8 million shares of $1 par common stock issued and outstanding. Beginning additional paid in capital was $13 million, and retained earnings totaled $40 million.In March 20X6, Fun City issued 2 million shares of common stock at a price of $2 per share.In May, the company distributed a 10% stock dividend at a time when Fun City’s common stock had a market value of $3 per share. Then in October, Fun City’s stock price dropped to $1 per share and the company purchased 2 million shares of treasury stock. For the year, Fun City earned net income of $26 million and declared cash dividends of $17 million. Complete the following tabulation to show what Fun City should report for stockholders’ equity at December 31, 20X6. Journal entries are not required. (Challenge)
|
(Amounts in millions) |
Common Stock |
+ |
Additional Paid In Capital |
+ |
Retained Earnings |
Treasury Stock |
= |
Total Equity |
|
|
Balance, Dec. 31, 20X5 |
$8 |
$13 |
$40 |
$0 |
$61 |
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|
Issuance of stock |
|||||||||
|
Stock dividend |
|||||||||
|
Purchase of treasury stock |
|||||||||
|
Net income |
|||||||||
|
Cash dividends |
|||||||||
|
Balance, Dec. 31, 20X6 |
$ |
$ |
$ |
$ |
$ |