Question

Comparative statements of shareholders' equity for Anaconda International Corporation were reported as follows for the fiscal years ending December 31, 2021. 2022, and 2023. ANACONDA INTERNATIONAL CORPORATION Statements of Shareholders' Equity For the Years Ended Dec. 31, 2021, 2022, and 2023 ($ in millions) Preferred Common Additional Stock Stock Paid-In $10 par $1 par Capital 309 10 449 45 Retained Earnings 1,640 Total Shareholders' Equity 2.000 68 458 785 Balance at January 1, 2021 Sale of preferred shares Sale of common shares Cash dividend, preferred Cash dividend, common Net income Balance at December 31, 2021 Retirement of shares Cash dividend, preferred Cash dividend, common 3-for-2 split effected in the form of a dividend Net income Balance at December 31, 2022 Common stock dividend Cash dividend, preferred Cash dividend, common Net income Balance at December 31, 2023 (30) (1) (14) 24e 2,229 (46) (1) (18) (14) 240 1,865 (10) (1) (18) 398 2.226 (59) 390 3,054 (1) (20) 432 2,578 (20) 432 3,465 15 7 2 800 Required: 1. Infer from the statements the events and transactions that affected Anaconda International Corporation's shareholders' equity during 2021 2022. and 2023. Prepare the journal entries that reflect those events and transactions. (Hint: In lieu of revenues and expenses. use an account titled "Income summary" to close net income or net loss.) 2. Prepare the shareholders' equity section of Anaconda's comparative balance sheets at December 31, 2023 and 2022.

Answer 1

1	Date	Account titles and explanation			Debit	Credit
	2021
		Cash			450
		Preferred stock				10
		Additional paid-in capital				440
		(Sale of preferred stock)
		Cash			54
		Common stock				9
		Additional paid-in capital				45
		(Sale of common shares)
		Preferred dividend			1
		Preferred dividend payable				1
		(Preferred dividend declared)
		Preferred dividend payable			1
		Cash				1
		(Preferred dividend paid)
		Dividends			14
		Dividend payable				14
		(Common dividend declared)
		Dividend payable			14
		Cash				14
		(Common dividend paid)
		Income summary			240
		Retained earnings				240
		(Net income recorded)
		Retained earnings			15
		Preferred dividend				1
		Dividends				14
		(Dividend closed)
	2022
		Retained earnings			10
		Common stock			6
		Additional paid-in capital			30
		Cash				46
		(Retirement of shares)
		Preferred dividend			1
		Preferred dividend payable				1
		(Preferred dividend declared)
		Preferred dividend payable			1
		Cash				1
		(Preferred dividend paid)
		Dividends			18
		Dividend payable				18
		(Common dividend declared)
		Dividend payable			18
		Cash				18
		(Common dividend paid)
		Additional paid-in capital			5
		Preferred stock				5
		(3-for-2 split effected in the form
		of dividend)
		Income summary			390
		Retained earnings				390
		(Net income recorded)
		Retained earnings			19
		Preferred dividend				1
		Dividends				18
		(Dividend closed)
	2023
		Retained earnings			59
		Common stock				9
		Additional paid-in capital				50
		(Common stock dividend)
		Preferred dividend			1
		Preferred dividend payable				1
		(Preferred dividend declared)
		Preferred dividend payable			1
		Cash				1
		(Preferred dividend paid)
		Dividends			20
		Dividend payable				20
		(Common dividend declared)
		Dividend payable			20
		Cash				20
		(Common dividend paid)
		Income summary			432
		Retained earnings				432
		(Net income recorded)
		Retained earnings			21
		Preferred dividend				1
		Dividends				20
		(Dividend closed)
2		Shareholder's equity section
				2023	2022
	Paid in capital:
	Preferred stock			15	15
	Common stock			72	63
	Additional paid-in capital			800	750
	Total Paid in capital			887	828
	Retained earnings			2578	2226
	Total shareholder's equity			3465	3054