Refer to the information provided in this picture in questio

Refer to the information provided in this picture in question P10-2B and the answers I would like you to answer the following question

Required:

taking into consideration all the transactions during 2015, respond to the following for Nautical

1- prepare the stockholder\'s equity section of the balance sheet as December 31, 2015.

2- prepare the statement of stockholder\'s equity for the year ended December 31, 2015.

3- explain how requirements 1 and 2 are similar and how they are different.

Solution

Solution :

1.stockholders’ equity section

PAID IN CAPITAL

PREFERRED STOCK
300 Shares of 10 each

3000

COMMON STOCK
3000 shares of 1 each

6000

ADDITIONAL PAID IN CAPITAL

52000

RETAINED EARNING

17530

Less : Treasury stock
50 shares of Rs 7 each

350

TOTAL STOCKHOLDERS EQUITY

78180

2.stockholders’ equity statement

PREFERRED STOCK

COMMON STOCK

ADDITIONAL PAID IN CAPITAL

TREAUSRY STOCK

RETAINED EARNING

TOTAL

OPENING BALANCE

1250

3000

19500

11500

35250

ISSUED SHARE FOR CASH

1750

3000

32250

37000

(175*10)

(3000*1)

(3000*9)+(175*30)

PURCHASE OF TREASURY STOCK

-1225

-1225

(175*7)

Resale of Treasury stock

250

875

1125

(125*2)

(125*7)

NET INCOME

7605

7605

CASH DIVIDEND

-1575

-1575

(125+3000+3000+175)*0.25

CLOSING BALANCE

3000

6000

52000

-350

17530

78180

3..both have same final closing amount that is shown under balance sheet - stockholders equity and stockholder equity statement. They are different in the sense stockholders equity sections shows final amount under each head like preferred stock, common stock etc whereas statement shows opening balance, current year transaction and closing final balance under each head.

1.stockholders’ equity section
PAID IN CAPITAL
PREFERRED STOCK 300 Shares of 10 each	3000
COMMON STOCK 3000 shares of 1 each	6000
ADDITIONAL PAID IN CAPITAL	52000
RETAINED EARNING	17530
Less : Treasury stock 50 shares of Rs 7 each	350
TOTAL STOCKHOLDERS EQUITY	78180