Chapter 6
Corporations: Contributed Capital and Dividends
307
b) Calculate the ending balance of retained earnings for the 2016 fiscal year.
AP-17B (
3
4
5
9
)
Gecko Inc. has the following in its shareholders’ equity section of the balance sheet.
Gecko Inc.
Shareholders' Equity
As at December 31, 2015
Share Capital
Preferred shares, $0.50, 40,000 non-cumulative shares
$84,000
authorized, 12,000 shares issued and outstanding
Common shares, 1,000,000 shares authorized,
337,500
75,000 shares issued and outstanding
Total Share Capital
421,500
Retained Earnings
147,525
Total Shareholders' Equity
$569,025
The following transactions occurred during the year 2016.
Jan 9 Issued 20,000 common shares for $4.50 per share and 3,000 preferred shares
for $7 per share.
Jun 7 Issued 4,000 preferred shares in exchange for equipment valued at $26,000
The fair value of the shares could not be readily determined.
Sep 8 Issued 12,000 common shares for $4.75 per share.
Oct 13 Declared $25,000 of dividends payable to shareholders on January 15, 2017.
The company uses the cash dividends method to record dividends.
Dec 31 Net income for the year was $89,000.
