Part B Problems and esay questions 14 marks our Company has

Part B: (Problems and esay questions) (14 marks) our Company has 1,000,000 share of common stock with a par value of $10. Additional paid-in capital 2 Marks) 10,000,000 and retained earnings is $12,000,000. The directors declare a 6% stock dividend when the value is $5. Then, the reduction of retained earnings as a result of the declaration will be em (2: ted below are several terms related to financial statements. (2 Marks) income statements balance sheet statement of cash flows statement of retained earnings (reconciliation of retained earnings) ired: h the letter that goes with each term. 1. Shows the financial condition of an accounting entity as of a particular date. 2. Details the inflows and outflows of cash during a specified period of time. 3. Summarizes the results of operations for a particular period of time 4. Links the balance shoet to the income statement (2 Marks) Company owns 25% of Dubai Company and accounts for the investment on the equity basis and does not te. Athe beginning of 2008, the investment in Dubai Company was $180,000. In 2008, Dubai Company 70,000 and paid dividends of $10,000. much will Sharjah Company report as equity in earnings of Dubai Company in 2008? (3 Marks) Company began the year with total assets of $400,000 and total liabilities of $300,000. formation and the accounting equation, answer each of the following independent questions was Abu Dhabi \'s stockholders\' equity at the beginning of the year? ing Abu Dhabi Company\'s assets increased by $50,000 and its total liabilities increased

Solution

1)

hence reduction in retained earnings =1200000

share capital	10000000
additional psc	10000000
total (a)	20000000
dividend (ax6%)	1200000