Reference no: EM132920083
Red Sox Ltd. reported the following balances on January 1, 2020:
Common shares $480,000
Preferred shares 150,000
Contributed surplus 65,000
Retained earnings 85,000
Accumulated other comprehensive income 25,000
Red Sox' corporate tax rate 26.5%
During the year, Red Sox performed the following:
1. The cumulative effect of the change from straight-line to accelerated depreciation resulted in a reduction to retained earnings of $55,000, before tax.
2. Issued common shares for a proceed of $48,000.
3. Retired 25% of preferred shares outstanding.
4. Earned net income of $57,600 and,
5. Generated other comprehensive income of $1,200.
6. Declared total dividend of $23,040.
Instructions
Problem 1: Prepare a statement of shareholders' equity, in a proper format with proper title and appropriate note disclosures, for Red Sox Ltd. for the year ended December 31, 2020.