Question

Ron Co., a publicly held company, began fiscal 2019 with 45,000 shares of its $10 par value common stock issued and outstanding and $3 million of total paid-in capital. Ron is authorized to issue a maximum of 500,000 shares, and at the beginning of fiscal 2019 it issued an additional 5,000 shares at $30 each. It also paid a dividend of $1 per share just prior to year-end. The other components of Ron’s stockholders’ equity at the start of fiscal 2019 consisted of retained earnings of $4 million and accumulated other comprehensive income of $1.5 million. For fiscal 2019, Ron Co. reported the following: sales revenue of $310,000, cost of goods sold of $140,000, selling and administrative expenses of $50,000, a loss on discontinued operations of $20,000, and an unrealized gain on available-for-sale investments of $15,000. Ron Co. is subject to an income tax rate of 20%, except for the $15,000 unrealized gain which is nontaxable.

Required—Prepare in good form the following for fiscal 2019:

3. Ron Co.’s Stockholders’ Equity as should appear in its end-of-year balance sheet

Answer 1