Noric Cruises Inc. began the month of October with the following balances: Common Stock, $150,000; Additional Paid-In Capital, $3,225,000; and Retained Earnings, $12,400,000. During October, Noric issued for cash 50,000 shares of common stock (with a stated value of $1) at $16 per share. Noric reported the following results for the month ended October 31:

Line Item Description Amount
Net income $2,350,000
Cash dividends declared 475,000

Prepare a statement of stockholders’ equity for the month ended October 31. If there is a net loss or there has been a decrease in stockholders' equity, enter that amount as a negative number using a minus sign. If an amount box does not require an entry, leave it blank.

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

$- Select -
$- Select -
$- Select -
$- Select -

- Select -
- Select -
- Select -
- Select -

- Select -
- Select -
- Select -
- Select -

- Select -
- Select -
- Select -
- Select -

$- Select -
$- Select -
$- Select -
$- Select -

1 answer

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.