stockholdersequity sectionP118A On January 1 2017 Tacoma Cor

stockholders\'equity section,*P11-8A On January 1, 2017, Tacoma Corporation had these stockholders\' equity accounts. nd calculate ratios. Common Stock ($10 par value, 70,000 shares issued and outstanding) Paid-in Capital in Excess of Par Value Retained Earnings $700,000 500,000 620,000 0 3,4, 5), AP GLS During the year, the following transactions occurred.

Solution

a)

b)

c)

d)Total dividend paid :98000+81200=179200

payout ratio = dividend /net income

         = 179200/400000

           = .448 or 44.80%

b)Beginning equity =700000+500000+620000=1820000

Average equity =[1820000beginning +2138800 ending ]/2

           = 3958800/2

          = 1979400

Return on common stockholders equity =net income /average equity

     = 400000/1979400

      = .2021 or 20.21%

Date	Account	Debit	credit
Jan 15	Cash dividend	35000
	Dividend payable		35000
	[being dividend declared 70000*.50]
Feb15	Dividend payable	35000
	cash		35000
	[being dividend declared paid]
April 15	stock dividend (7000*14)	98000
	stock dividend distributable (7000*10)		70000
	paid in capital in excess of par		28000
	[Being stock dividend declared 70000*.10=7000]
may 15	stock dividend distributable	70000
	common stock		70000
dec1	cash dividend	46200
	Dividend payable		46200
	[being dividend declared (70000+7000=77000shares*.60]
dec31	Income summary	400000
	Retained earning		400000
	[being net income closed]
	Retained earning	179200
	stock dividend		98000
	cash dividend (35000+46200)		81200
	[being dividend closed]