To prepare a statement of stockholders' equity for Noric Cruises Inc. for the month ended October 31, we need to account for the changes in the Common Stock, Additional Paid-In Capital, and Retained Earnings.
Here is the calculation for each section:
1. Common Stock
- Beginning Balance: $150,000
- New Stock Issued: 50,000 shares * $1 (stated value) = $50,000
- Ending Balance: $150,000 + $50,000 = $200,000
2. Additional Paid-In Capital
- Beginning Balance: $3,225,000
- Amount in excess of stated value from new stock issued: 50,000 shares * ($16 - $1) = $50,000 * $15 = $750,000
- Ending Balance: $3,225,000 + $750,000 = $3,975,000
3. Retained Earnings
- Beginning Balance: $12,400,000
- Net Income for the month: $2,350,000
- Dividends Declared: $475,000 (this will reduce retained earnings)
- Ending Balance: $12,400,000 + $2,350,000 - $475,000 = $14,275,000
Now we can fill out the statement:
Noric Cruises Inc.
Statement of Stockholders' Equity
For the Month Ended October 31
| Line Item Description | Common Stock | Additional Paid-In Capital | Retained Earnings | Total | |-----------------------|---------------|----------------------------|-------------------|-------| | Beginning Balance | $150,000 | $3,225,000 | $12,400,000 | $15,775,000 | | Stock Issued | $50,000 | $750,000 | | $800,000 | | Net Income | | | $2,350,000 | $2,350,000 | | Dividends Declared | | | ($475,000) | ($475,000) | | Ending Balance | $200,000 | $3,975,000 | $14,275,000 | $18,450,000 |
Totals:
- Total Common Stock: $200,000
- Total Additional Paid-In Capital: $3,975,000
- Total Retained Earnings: $14,275,000
- Grand Total (Total Stockholders' Equity): $18,450,000
Fill in the amounts into your statement of stockholders' equity.
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