Reference no: EM132816458

Question - Fred have decided to convert Oliveiras from a sole proprietorship to a corporation. During the year, Oliveiras Corp. issues common stock and pays dividends on that common stock. Fred gives you a list of transactions to record the entries for the issuance of common stock and the payment of cash dividends. At the end of Year 2, Fred would like to know how much is in retained earnings Oliveiras Corp. and what the ending value of stockholders' equity is.

A. On January 1, Year 2, Oliveiras Corporation issues 10,000 shares of $100 par 10% preferred stock for $100 per share.

B. On January 1, Year 2 Oliveiras Corporation issues 25, 000 shares of $20 par value common stock with a par value of $20, for $25 per share.

C. On March 1, Year 2, Oliveiras Corporation declares a $1 cash dividend per share on its common stock, to stockholders of record on March 15, payable April 1.

D. On March 1, Year 2, Oliveiras Corporation declared a 10% cash dividend on its preferred stock payable March 15.

E. On June 1, Year 2, Oliveiras Corporation declared a 15% Common stock dividend to stockholders of record on June 15, distributable June 30. The market price of the stock was $30 per share.

F. Oliveiras Corporation earned net income for Year 2 of $255,000

Required - How can prepare statement of Retained Earnings, assuming the beginning balance is $35,000.