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126 retained earnings at the beginning of 2015 falcon corporation had 2 million shar 4295555


126.Retained earnings

At the beginning of 2015, Falcon Corporation had 2 million shares of $2 par value common stock outstanding and retained earnings of $17 million. During 2015, Falcon earned $12 million, declared a 5% stock dividend when the price of the stock was $19 per share, and paid a year-end cash dividend of $2.50 per share. (The cash dividend was declared after the stock dividend had been distributed.) At the end of 2015, what are the company's retained earnings? 





127.Stock dividend and treasury stock

At the beginning of the current year, King Cole, Inc. had 300,000 shares of capital stock outstanding and total stockholders' equity of $1,200,000. During the year, the company earned net income of $325,000, declared cash dividends of $150,000, distributed a 5% stock dividend of 15,000 shares when the market price of the stock was $16 per share, and purchased 3,000 shares of treasury stock at a cost of $13 per share. Compute the following at the end of the current year:

(a) Total stockholders' equity:
(b) Number of shares of stock outstanding:
(c) Book value per share: 




128.Stock dividends

What is the effect of a stock dividend? 




129.Accounting changes and prior period adjustment

Prior period adjustments affect the income of past accounting periods. Explain how prior period adjustments are shown in the financial statements. 




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