Final answer:
Roger Corporation, a publicly traded company, has authorized 207,000 $4 noncumulative preferred shares and an unlimited number of common shares. The shareholders’ equity accounts on January 1, 2021, include preferred shares, common shares, contributed surplus, retained earnings, and accumulated other comprehensive income.
Step-by-step explanation:
Roger Corporation, a publicly traded company, is authorized to issue 207,000 $4 noncumulative preferred shares and an unlimited number of common shares. The shareholders’ equity accounts in the general ledger on January 1, 2021, are as follows:
Preferred shares (8,500 shares issued) $467,500
Common shares (68,600 shares issued) $1,097,600
Contributed surplus $22,700
Retained earnings $841,000
Accumulated other comprehensive income $10,400
The preferred shares have a par value of $4 per share, and there are 207,000 shares authorized. However, only 8,500 shares have been issued. The value of the issued preferred shares is calculated by multiplying the number of issued shares (8,500) by the par value ($4 per share). This results in a value of $467,500.
The common shares have a par value of $1 per share, and there is an unlimited number of authorized common shares. Currently, 68,600 common shares have been issued. To calculate the value of the issued common shares, multiply the number of issued shares (68,600) by the par value ($1 per share). This results in a value of $1,097,600.
The contributed surplus, retained earnings, and accumulated other comprehensive income are additional components of the shareholders’ equity. These accounts represent different sources of equity for the company, such as contributions from shareholders and accumulated profits or losses.