Reference no: EM132982313
Question - ABC Company is authorized to issue 500,000, 10% preferred stocks (par value Rs. 10 each) and 1,000,000 common stocks (par value Rs. 10 each).
Company issued 25,000 preferred stocks at par on Jan 21, 2015.
Company issued 250,000 common stocks at par on Apr 19, 2015.
Company issued 120,000 preferred stocks at Rs 12 each on Aug 29, 2015.
Company issued 225,000 preferred stocks at par on Sep 08, 2015.
Company issued 350,000 common stocks at Rs. 20 each on Oct 10, 2015.
At the end of Dec. 31, 2015, company earned Gross Profit of Rs. 6,950,000 which is 20% of total revenue.
Operating Expense includes salaries and admin expense of Rs 100,000, Advertising Expense of Rs 175,000 and other miscellaneous operating expenses of the year are 8% of total revenue.
Interest was paid @ 6% of Notes Payable Rs. 750,000, 10% of Mortgage Payable Rs. 800,000 and 10% on long term loan of 2,000,000.
Tax was paid @ 30%.
Company reacquired its 125,000 shares of common stock at par
Interim Dividend declared: Rs. 0.50 per share on common stocks and Rs. 60,000 against preferred stocks
Final Dividend declared: Rs. 1.50 per share on common stocks and preferred were paid in full.
Retained Earnings balance (Dec. 31, 2014) was Rs. 725,000.
Required -
a) "Prepare a" Retained Earnings Statement for the year ended Dec. 31, 2015.
b) "Prepare a" Shareholders' Equity Statement for the year ended Dec. 31, 2015.