Reference no: EM132889711
Problem - Changes in Shareholders' Equity The shareholders' equity section of Flores Design Company's December 31, 2018, balance sheet appeared as follows:
Contributed Capital:
Preferred stock, $100 par (10,000 shares authorized, 1,250 shares issued) $125,000
Additional paid-in capital on preferred stock 55,000
Common stock, $10 par (60,000 shares authorized, 15,000 shares issued) 150,000
Additional paid-in capital on common stock 105,000
Total contributed capital $435,000
Retained earnings 78,000
Contributed capital and retained earnings $513,000
Less: Treasury stock (300 shares of common at $14 per share) (4,200)
Total Shareholders' Equity $508,800
During 2019, the company entered into the following transactions affecting shareholders' equity:
Issued 250 shares of preferred stock at $164 per share.
Issued 3,000 shares of common stock at $17 per share.
Reacquired 200 of its own common shares as treasury stock for $15 per share.
Reissued 250 shares of treasury stock at $17 per share (FIFO basis).
Net income for 2016 was $46,500. Dividends of $25,000 were distributed.
Required -
Prepare a statement of shareholders' equity for the year ended December 31, 2019, for Flores.
Compute the return on shareholders' equity for 2019.