Field Company
STATEMENT OF RETAINED EARNINGS
For the Year Ending December 31, Year 6
Field Co's stockholders' equity account balances at December 31, year 5, were as follows:
Common stock: $800,000
Additional paid-in capital: $1,600,000
Retained earnings: $1,845,000
The following year 6 transactions and other information relate to the stockholders' equity accounts:
Field had 400,000 authorized shares of $5 par common stock, of which 160,000 shares were issued and outstanding. On March 5, year 6, Field acquired 5,000 shares of its common stock for $10 per share to hold as treasury stock. The shares were originally issued at $15 per share. Field uses the cost method to account for treasury stock. Treasury stock is permitted in Field's state of incorporation. On July 15, year 6, Field declared and distributed a property dividend of inventory. The inventory had a $75,000 carrying value and a $60,000 fair market value. On January 2, year 1, Field granted stock options to employees to purchase 20,000 shares of Field's common stock at $18 per share. The measurement date is the same as the grant date. On October 1, year 6, employees exercised all 20,000 options when the market value of the stock was $25 per share. Field issued new shares to settle the transaction. The stock options were accounted for in accordance with the intrinsic value method, which was in effect at the time. Field's net income for year 6 was $240,000.
Complete the following schedules for retained earnings and for the stockholders' equity section of the balance sheet for Field Company. Enter values as whole numbers and deductions using parenthesis.
Field Company
STATEMENT OF RETAINED EARNINGS
For the Year Ending December 31, Year 6
Beginning retained earnings, 1/1/Y6
Net income
Dividends
End retained earnings, 12/31/Y6
