Listed below are events that affect stockholders’ equity.

c. Reported sales revenue of $120,000.

Required:

For each of the events, indicate whether it increases retained earnings (I), decreases retained earnings (D), or has no effect on retained earnings (NE).

Allocating kidneys to those with the highest net benefit (where net benefit is measured as the expected increase in life span from a transplant) is an attempt to maximize A. consumer surplus. B. producer surplus. C. profit. D. equity E. respect for elders.

For each of the following, (I) identify the account as an asset, liability, equity, revenue, or expense; (2) identify the normal balance of the account; and (3) enter debit or credit to identify the kind of entry that would increase the account balance.

e. Accounts Receivable

The following financial statement information is from five separate companies.

Required
1. Answer the following questions about Company V.
 a. What is the amount of equity on December 31, 2009?
 b. What is the amount of equity on December 31, 2010?
 c. What is the net income or loss on December 31, 2010?
2. Answer the following questions about Company W.
 a. What is the amount of equity on December 31, 2009?
 b. What is the amount of equity on December 31, 2010?
 c. What is the amount of liabilities for year 2010?
3. Compute the amount of owner investments for Company X during year 2010.
4. Compute the amount of liabilities for Company Y on December 31, 2009.
5. Compute the amount of assets for Company C on December 31, 2010.

Find the sample proportions and test statistic for equal proportions. Find the $p$-value.

Home equity loan default rates in two banks: $x_1=36, n_1=480, x_2=26, n_2=520$, $\alpha=.05$, right-tailed test.

For each of the following, (I) identify the account as an asset, liability, equity, revenue, or expense; (2) identify the normal balance of the account; and (3) enter debit or credit to identify the kind of entry that would increase the account balance.

d. Prepaid Insurance

The following events relate to shareholders’ equity transactions of Wilson Supply Company during the first year of its existence. Present journal entries for each of the transactions. c. January 8: The firm issues 4,000 shares of preferred stock at par.

Determine whether each of the following changes in profitability ratios normally is good news or bad news about a company. a. Increase in profit margin. b. Decrease in asset turnover. c. Decrease in return on equity. d. Increase in the price-earnings ratio.

The stockholders' equity of Lakeside Occupational Therapy, Inc. on December 31, 2017, follows:

$$\begin{array}{c} \textbf{Stockholders' Equity}\\ \end{array}$$

$$\begin{array}{lrr} \text{Paid-In Capital:}\\ \hspace{10pt}\text{Common Stock-\$1 Par Value; 1,200 shares}\\ \hspace{20pt}\text{authorized, 400 shares issued and outstanding}\hspace{10pt}&\text{\$\hspace{23pt}400}\\ \hspace{10pt}\text{Paid-In Capital in Excess of Par-Common}&\underline{\text{\hspace{20pt}1,600}}\\ \hspace{10pt}\text{Total Paid-In Capital}&\text{\$\hspace{15pt}2,000}\\ \text{Retained Earnings}&\underline{\text{\hspace{10pt}120,000}}\\ \text{Total Stockholders' Equity}&\text{\underline{\underline{\$\hspace{5pt}122,000}}}\\ \end{array}$$

On April 30, 2018, the market price of Lakeside's common stock was $16 per share and the company declared a 13% stock dividend. The stock was distributed on May 15.

Requirements

1. Journalize the declaration and distribution of the stock dividend.
2. Prepare the stockholders' equity section of the balance sheet as of May 31, 2018. Assume Retained Earnings are$120,000 on April 30, 2018, before the stock dividend, and the only change made to Retained Earnings before preparing the balance sheet was closing the Stock Dividends account.

A 3-for-2 stock split is being considered by Mammoth Corporation. The equity position of the stockholders is now displayed. Shares of the stock currently cost $120 each. Retained earnings consist of earnings available for Common Stock for the most recent period.

$$\begin{array}{lr} \text { Preferred stock } & \$ 1,000,000 \\ \text { Common stock (100,000 shares at } \$ 3 \text { par) } & 300,000 \\ \text { Paid-in capital in excess of par } & 1,700,000 \\ \text { Retained earnings } & 10,000,000 \\ \quad \text { Total stockholders' equity } & \$ 13,000,000 \end{array}$$

What consequences might the stock split have on Mammoth?

The stockholders’ equity section of Leyland Corporation’s balance sheet at December 31 is presented here.

$$\begin{array}{c} \textbf{LEYLAND CORPORATION}\\ \textbf{Balance Sheet (partial)}\\ \end{array}$$

$$\begin{array}{lrr} \text{Stockholders’ equity}\\ \qquad\text{Paid-in capital}\\ \qquad\qquad\text{Preferred stock, cumulative, 10,000 shares authorized,}\\ \qquad\qquad\qquad\text{6,000 shares issued and outstanding}&\text{\$\hspace{7pt}600,000}\\ \qquad\qquad\text{Common stock, no par, 750,000 shares authorized,}\\ \qquad\qquad\qquad\text{580,000 shares issued}&\underline{\text{\hspace{6pt}2,900,000}}\\ \qquad\qquad\qquad\text{Total paid-in capital}&\text{\hspace{1pt}3,500,000}\\ \qquad\text{Retained earnings}&\underline{\text{\hspace{6pt}1,158,000}}\\ \qquad\text{Total paid-in capital and retained earnings}&\text{\hspace{1pt}4,658,000}\\ \qquad\text{Less: Treasury stock (6,000 common shares)}&\underline{\text{\hspace{19pt}32,000}}\\ \text{Total stockholders’ equity}&\underline{\underline{\text{\$\hspace{1pt}4,626,000}}}\\ \end{array}$$

Instructions

From a review of the stockholders’ equity section, answer the following questions.

(b) Assuming there is a stated value, what is the stated value of the common stock?

The following financial statement information is from five separate companies:

Required

1. Answer the following questions about Company A:$~~~~$a. What is the amount of equity on December 31, 2014?$~~~~$b. What is the amount of equity on December 31, 2015?$~~~~$c. What is the amount of liabilities on December 31, 2015?
2. Answer the following questions about Company B:$~~~~$a. What is the amount of equity on December 31, 2014?$~~~~$b. What is the amount of equity on December 31, 2015?$~~~~$c. What is net income for year 2015?
3. Calculate the amount of assets for Company C on December 31, 2015.
4. Calculate the amount of owner investments for Company D during year 2015.
5. Calculate the amount of liabilities for Company E on December 31, 2014.

For each of the following, (I) identify the account as an asset, liability, equity, revenue, or expense; (2) identify the normal balance of the account; and (3) enter debit or credit to identify the kind of entry that would increase the account balance.

k. Notes Payable

Indicate in which section of the balance sheet each of the following accounts is classified. Use the symbols CA for current assets, NCA for noncurrent assets, CL for current liabilities, LTL for long-term liabilities, and SHE for stockholders' equity.
b. Dividends Payable