Issued
105,000
shares
$1
par common stock
compensation
4,500
hours of legal services
rate
$140
per hours
legal expense
630,000
$
common stock
105,000
$
paid-in capital-excess of par
525,000
$
Issued
109,000
shares
$1
par common stock
compensation
4,900
hours of legal services
rate
$180
per hours
legal expense
882,000
$
common stock
109,000
$
paid-in capital-excess of par
773,000
$
paid-in capital-excess of par
525,000
$
paid-in capital-excess of par
773,000
$
issued
200,000,000
shares
$1
par common stock
paid-in capital-excess of par
$1,600,000,000
reacquires
3,000,000
shares
$7
per share
paid-in capital-excess of par
8
$
issued
120,000,000
shares
$1
par common stock
paid-in capital-excess of par
$1,080,000,000
reacquires
1,000,000
shares
$7
per share
paid-in capital-excess of par
9
$
total paid-in capital will decline by
21,000,000
$
common stock
paid-in capital-excess of par
total paid-in capital will decline by
7,000,000
$
common stock
paid-in capital-excess of par
3,000,000
$
24,000,000
$
paid-in capital-share repurchase
6,000,000
$
cash
21,000,000
$
1,000,000
$
9,000,000
$
paid-in capital-share repurchase
3,000,000
$
cash
7,000,000
$
reacquired
3,000,000
treasury stock shares
$22
per share
2,000,000
treasury stock shares
$27
per share
sell
2,000,000
treasure stock shares
$30
per share
cost by FIFO
reacquired
2,000,000
treasury stock shares
$20
per share
1,000,000
treasury stock shares
$26
per share
sell
1,000,000
treasure stock shares
$27
per share
cost by FIFO
paid-in capital-share repurchase will increase by
16,000,000
$
Cash
paid-in capital-share repurchase will increase by
7,000,000
$
Cash
60,000,000
$
paid-in capital-share repurchase
16,000,000
$
treasury stock
44,000,000
$
27,000,000
$
paid-in capital-share repurchase
7,000,000
$
treasury stock
20,000,000
$
declared
5%
stock dividend on
60,000,000
shares
$1
par common shares
market price
$27
13-Jun
common stock shares
3,000,000
common stock
3,000,000
$
retained earnings
81,000,000
$
declared
5%
stock dividend on
60,000,000
shares
$1
par common shares
market price
$27
13-Jun
common stock shares
3,000,000
common stock
3,000,000
$
retained earnings
81,000,000
$
Record declaration and distribution of stock dividend
Record declaration and distribution of stock dividend
distributed July 1
retained earning
81,000,000
$
common stock
paid-in capital-excess of par
distributed July 1
retained earning
81,000,000
$
common stock
paid-in capital-excess of par
3,000,000
$
78,000,000
$
3,000,000
$
78,000,000
$
statement of comprehensive income
net income
other comprehensive income:
shareholders' equity
total shareholders' equity
statement of comprehensive income
net income
other comprehensive income:
shareholders' equity
total shareholders' equity
Change in net unrealized gains on AFS investments, net tax $28, ($16), and $25
other
common stock
additional paid-in capital
retained earnings
accumulated other comprehensive income
accumulated other comprehensive income
Change in net unrealized gains on AFS investments, net tax $28, ($16), and $25
other
common stock
additional paid-in capital
retained earnings
accumulated other comprehensive income
accumulated other comprehensive income
2024
2023
2022
$955
$785
$640
$38
($26)
$32
($2)
($2)
$1
Total comprehensive income
$991
$757
$673
2024
2023
$380
$380
$9,080
$9,080
$8,160
$7,604
$126
$90
$17,746
$17,154
$126
2024
2023
2022
$823
$653
$508
$27
($20)
$22
($2)
($1)
$2
Total comprehensive income
$848
$632
$532
2024
2023
$315
$315
$7,868
$7,868
$6,948
$6,392
$91
$66
$15,222
$14,641
$91
accumulated other comprehensive income, 2023
$90
Change in net unrealized gains on investments
$38
Change in other
($2)
accumulated other comprehensive income, 2024
$126
accumulated other comprehensive income, 2023
$66
Change in net unrealized gains on investments
$27
Change in other
($2)
accumulated other comprehensive income, 2024
$91
Shareholders' equity
common stock, 80 million shares at $1 par
paid-in capital-excess of par
retained earnings
1. February 12, 2024 reacquired 1 million common shares at $15 per share
2. June 9, 2025 reacquired 2 million common shares at $12 per share
3. May 25, 2026 sold 2 million treasury shares at $17 per share. Determine cost as the weighted-average cost of treasury shares
4. for previous transaction, assume Meca determines the cost of treasury shares by the FIFO method
Shareholders' equity
common stock, 80 million shares at $1 par
paid-in capital-excess of par
retained earnings
1. February 12, 2024 reacquired 1 million common shares at $20 per share
2. June 9, 2025 reacquired 2 million common shares at $17 per share
3. May 25, 2026 sold 2 million treasury shares at $23 per share. Determine cost as the weighted-average cost of treasury shares
4. for previous transaction, assume Meca determines the cost of treasury shares by the FIFO method
1
2/12/2024
Treasury stock
$80
cash
$340
$450
2
6/9/2025
Treasury stock
cash
3
5/25/2026
Cash
3. May 25, 2026 sold 2 million treasury shares at $17 per share. Determine cost as the weighted-average cost of treasury shares
paid-in capital-share repurchase
treasury stock
4
5/25/2026
Cash
paid in capital-share repurchase
13
$
treasury stock
27,000,000
$
1
2/12/2024
Treasury stock
$70
cash
$500
$610
2
6/9/2025
Treasury stock
cash
3
5/25/2026
Cash
3. May 25, 2026 sold 2 million treasury shares at $23 per share. Determine cost as the weighted-average cost of treasury shares
paid-in capital-share repurchase
treasury stock
4
5/25/2026
Cash
paid in capital-share repurchase
18
$
treasury stock
37,000,000
$
15,000,000
$
15,000,000
$
24,000,000
$
24,000,000
$
34,000,000
$
8,000,000
$
26,000,000
$
34,000,000
$
7,000,000
$
27,000,000
$
20,000,000
$
20,000,000
$
34,000,000
$
34,000,000
$
46,000,000
$
10,000,000
$
36,000,000
$
46,000,000
$
9,000,000
$
37,000,000
$
Paid-in capital:
preferred stock, 8.5%, 100,000 shares at $1 par
common stock, 505,000 shares at $1 par
paid-in capital-excess of par, preferred
paid-in capital-excess of par, common
retained earnings
treasury stock, at cost; 5,000 common shares
total shareholders' equity
March 3, declared property dividend 300,000 shares of common stock; book value $870,000, $3 per share were distributed March 31 to shareholders of record March 15
May 3, 5-for-4 stock spilit was declared and distributed. Stock split was effected in the form of 25% stock dividend. Market value of $1 par common stock was $10 per share.
July 5, 3% common stock dividend was declared and distributed. Market value of common stock was $10 per share.
December 1, board of directors declared 8.5% cash dividend on the 100,000 preferred shares, payable December 28 to shareholders of record December 20.
December 1, board of directors declared $0.60 per share on its common shares, payable on December 28 to shareholders of record December 20.
Prepare shareholders' equity section of the balance sheet at December 31, 2024. Net income for the year was $900,000
market value of shares
Paid-in capital:
preferred stock, 8.5%, 96,000 shares at $1 par
common stock, 464,600 shares at $1 par
paid-in capital-excess of par, preferred
paid-in capital-excess of par, common
retained earnings
treasury stock, at cost; 4,600 common shares
total shareholders' equity
March 3, declared property dividend 280,000 shares of common stock; book value $814,000, $3 per share were distributed March 31 to shareholders of record March 15
May 3, 5-for-4 stock spilit was declared and distributed. Stock split was effected in the form of 25% stock dividend. Market value of $1 par common stock was $12 per share.
July 5, 3% common stock dividend was declared and distributed. Market value of common stock was $12 per share.
December 1, board of directors declared 8.5% cash dividend on the 96,000 preferred shares, payable December 28 to shareholders of record December 20.
December 1, board of directors declared $0.40 per share on its common shares, payable on December 28 to shareholders of record December 20.
Prepare shareholders' equity section of the balance sheet at December 31, 2024. Net income for the year was $860,000
market value of shares
a.
3-Mar
Investment in Consolidated Paper
$100,000
$505,000
$1,615,000
Retained earnings
$2,665,000
$9,945,000
($50,000)
15-Mar
No journal entry required
$14,780,000
31-Mar
Property dividends payable
March 3, declared property dividend 300,000 shares of common stock; book value $870,000, $3 per share were distributed March 31 to shareholders of record March 15
May 3, 5-for-4 stock spilit was declared and distributed. Stock split was effected in the form of 25% stock dividend. Market value of $1 par common stock was $10 per share.
July 5, 3% common stock dividend was declared and distributed. Market value of common stock was $10 per share.
b.
3-May
Paid-in capital-excess of par
December 1, board of directors declared 8.5% cash dividend on the 100,000 preferred shares, payable December 28 to shareholders of record December 20.
December 1, board of directors declared $0.60 per share on its common shares, payable on December 28 to shareholders of record December 20.
c.
5-Jul
Retained earnings
Prepare shareholders' equity section of the balance sheet at December 31, 2024. Net income for the year was $900,000
900,000
$
d.
1-Dec
Retained earnings
20-Dec
No journal entry required
28-Dec
Cash dividends payable
e.
1-Dec
Retained earnings
20-Dec
No Journal entry required
28-Dec
Cash dividends payable
a.
3-Mar
Investment in Consolidated Paper
$96,000
$464,600
$1,575,000
Retained earnings
$2,625,000
$9,545,000
($55,200)
15-Mar
No journal entry required
$14,250,400
31-Mar
Property dividends payable
March 3, declared property dividend 280,000 shares of common stock; book value $814,000, $3 per share were distributed March 31 to shareholders of record March 15
May 3, 5-for-4 stock spilit was declared and distributed. Stock split was effected in the form of 25% stock dividend. Market value of $1 par common stock was $12 per share.
July 5, 3% common stock dividend was declared and distributed. Market value of common stock was $12 per share.
b.
3-May
Paid-in capital-excess of par
December 1, board of directors declared 8.5% cash dividend on the 96,000 preferred shares, payable December 28 to shareholders of record December 20.
December 1, board of directors declared $0.40 per share on its common shares, payable on December 28 to shareholders of record December 20.
c.
5-Jul
Retained earnings
Prepare shareholders' equity section of the balance sheet at December 31, 2024. Net income for the year was $860,000
840,000
$
d.
1-Dec
Retained earnings
20-Dec
No journal entry required
28-Dec
Cash dividends payable
e.
1-Dec
Retained earnings
20-Dec
No Journal entry required
28-Dec
Cash dividends payable
30,000
$
gain on investment
30,000
$
900,000
$
property dividends payable
900,000
$
900,000
$
investment in Consolidated Paper
900,000
$
$125,000
Common Stock
$125,000
187,500
$
Common Stock
18,750
$
Paid-in capital-excess of par
168,750
$
$8,500
Cash dividends payable
$8,500
$8,500
Cash
$8,500
386,250
$
Cash dividends payable
386,250
$
386,250
$
Cash
386,250
$
26,000
$
gain on investment
26,000
$
840,000
$
property dividends payable
840,000
$
840,000
$
investment in Consolidated Paper
840,000
$
$115,000
Common Stock
$115,000
207,000
$
Common Stock
17,250
$
Paid-in capital-excess of par
189,750
$
$8,160
Cash dividends payable
$8,160
$8,160
Cash
$8,160
236,900
$
Cash dividends payable
236,900
$
236,900
$
Cash
236,900
$
shares outstanding May 3
Stock dividend %
Shares to be issued
Par value
500,000
25%
125,000
$1
shares outstanding July 5
Market value
625,000
3%
18,750
$10
shares outstandings
505,000
(5,000)
125,000
18,750
643,750
paid-in capital
Paid-in capital:
preferred stock, 8.5%, 100,000 shares at $1 par
$100,000
$100,000
common stock, 505,000 shares at $1 par
$505,000
$143,750
$648,750
paid-in capital-excess of par, preferred
$1,615,000
$1,615,000
paid-in capital-excess of par, common
$2,665,000
43,750
$
$2,708,750
retained earnings
$9,945,000
(582,250)
$
$9,362,750
treasury stock, at cost; 5,000 common shares
($50,000)
($50,000)
total shareholders' equity
$14,780,000
($394,750)
$14,385,250
$14,385,250
shares outstanding May 3
Stock dividend %
Shares to be issued
Par value
460,000
25%
115,000
$1
shares outstanding July 5
Market value
575,000
3%
17,250
$12
shares outstandings
464,600
(4,600)
115,000
17,250
592,250
Consolidated Paper, Inc
shareholders' equity
12/31/2024
paid-in capital
Paid-in capital:
preferred stock, 8.5%, 96,000 shares at $1 par
$96,000
$96,000
common stock, 464,600 shares at $1 par
$464,600
$132,250
$596,850
paid-in capital-excess of par, preferred
$1,575,000
$1,575,000
paid-in capital-excess of par, common
$2,625,000
74,750
$
$2,699,750
retained earnings
$9,545,000
(432,060)
$
$9,112,940
treasury stock, at cost; 5,000 common shares
($55,200)
($55,200)
total shareholders' equity
$14,250,400
($225,060)
$14,025,340
$14,025,340
Consolidated Paper, Inc
shareholders' equity
12/31/2024
Value of stock dividend
$125,000
187,500
$
Value of stock dividend
$115,000
207,000
$
shareholders' equity
common stock, 8 million at $1 par
$8,000,000
paid-in capital-excess of par
$48,000,000
$6
retained earnings
$91,000,000
15-Feb
reacquired 380,000 shares at $9 per share
17-Feb
reacquired 380,000 shares at $6.50 per share
9-Nov
sold 260,000 shares at $8 per share (FIFO)
prepared shareholders' equity for 12-31-26
Net income $15 million in 2024
Net income $17 million in 2025
Net income $19 million in 2026
15-Feb
common stock
380,000
$
paid-in capital-excess of par
2,280,000
$
cash 2-15-24
3,420,000
$
cash 2-17-24
2,470,000
$
shareholders' equity
common stock, 6 million at $1 par
$6,000,000
paid-in capital-excess of par
$48,000,000
$8
retained earnings
$97,000,000
15-Feb
reacquired 460,000 shares at $11 per share
17-Feb
reacquired 460,000 shares at $8.50 per share
9-Nov
sold 320,000 shares at $10 per share (FIFO)
prepared shareholders' equity for 12-31-26
Net income $19 million in 2024
Net income $21 million in 2025
Net income $23 million in 2026
15-Feb
common stock
460,000
$
paid-in capital-excess of par
3,680,000
$
cash 2-15-24
5,060,000
$
cash 2-17-24
3,910,000
$
2/15/2024
common stock
380,000
$
paid-in capital-excess of par
2,280,000
$
retained earnings
760,000
$
cash
2/17/2024
common stock
380,000
$
paid-in capital-excess of par
2,280,000
$
paid-in capital-share repurchase
cash
11/9/2024
Cash
2,080,000
$
common stock
paid-in capital-excess of par
2/15/2024
treasury stock
3,420,000
$
cash
2/17/2024
Treasury stock
2,470,000
$
cash
11/9/2024
Cash
2,080,000
$
Retained earnings
260,000
$
treasury stock
2/15/2024
common stock
460,000
$
paid-in capital-excess of par
3,680,000
$
retained earnings
920,000
$
cash
2/17/2024
common stock
460,000
$
paid-in capital-excess of par
3,680,000
$
paid-in capital-share repurchase
cash
11/9/2024
Cash
3,200,000
$
common stock
paid-in capital-excess of par
2/15/2024
treasury stock
5,060,000
$
cash
2/17/2024
Treasury stock
3,910,000
$
cash
11/9/2024
Cash
3,200,000
$
Retained earnings
320,000
$
treasury stock
Shareholders' equity
Retirement
Treasury Stock
paid-in capital
common stock
$7,500,000
$8,000,000
3,420,000
$
paid-in capital-excess of par
$45,260,000
$48,000,000
paid-in capital-share repurchase
190,000
$
retained earnings
$141,240,000
$141,740,000
less: treasury stock
(3,550,000)
$
190,000
$
Total shareholders' equity
$194,190,000
$194,190,000
2,470,000
$
260,000
$
1,820,000
$
3,420,000
$
2,470,000
$
2,340,000
$
Shareholders' equity
Retirement
Treasury Stock
paid-in capital
common stock
$5,400,000
$6,000,000
5,060,000
$
paid-in capital-excess of par
$43,520,000
$48,000,000
paid-in capital-share repurchase
230,000
$
retained earnings
$159,080,000
$159,680,000
less: treasury stock
(5,450,000)
$
230,000
$
Total shareholders' equity
$208,230,000
$208,230,000
3,910,000
$
320,000
$
2,880,000
$
5,060,000
$
3,910,000
$
3,520,000
$
Statement of retained earnings
1
2026
2025
2024
Balance at beginning of year
$7,035,952
$5,715,052
$5,884,552
Net income (loss)
$3,468,700
$2,360,900
($169,500)
2
Deductions:
stock dividend (36,000 shares)
$252,000
common shares retired (126,000 shares)
$252,000
3
common stock cash dividends
$929,950
$788,000
$0
balance at end of year
$9,322,702
$7,035,952
$5,715,052
on December 31, 2023 common shares
common stock, 1,880,000 shares at $1 par
$1,880,000
4
paid-in capital-excess of par
$5,640,000
5
common stock, 2025
126,000
$
paid-in capital-excess of par
$378,000
6
paid-in capital-excess of par
$3
common stock, 2026
36,000
$
7
8
9
Statement of retained earnings
1
2026
2025
2024
Balance at beginning of year
$7,011,452
$5,969,552
$5,864,552
Net income (loss)
$3,448,700
$2,340,900
($168,000)
2
Deductions:
stock dividend (35,500 shares)
$248,500
common shares retired (124,000 shares)
$248,000
3
common stock cash dividends
$919,950
$778,000
$0
balance at end of year
$9,291,702
$7,284,452
$5,696,552
on December 31, 2023 common shares
common stock, 1,865,000 shares at $1 par
$1,865,000
4
paid-in capital-excess of par
$7,460,000
5
common stock, 2025
124,000
$
~—y7y-
paid-in capital-excess of par
$496,000
6
paid-in capital-excess of par
$4
common stock, 2026
35,500
$
7
8
9
retained earnings
$169,500
income summary
$169,500
income summary
$2,360,900
retained earnings
$2,360,900
common stock
126,000
$
paid-in capital-excess of par
$378,000
retained earnings
$252,000
cash
756,000
$
retained earnings
$788,000
cash dividends payable
$788,000
cash dividends payable
$788,000
cash
$788,000
income summary
$3,468,700
retained earnings
$3,468,700
retained earnings
$252,000
common stock
36,000
$
paid-in capital-excess of par
$216,000
retained earnings
$929,950
cash dividends payable
$929,950
cash dividends payable
$929,950
cash
$929,950
retained earnings
$168,000
income summary
$168,000
income summary
$2,340,900
retained earnings
$2,340,900
common stock
124,000
$
paid-in capital-excess of par
$496,000
retained earnings
$248,000
cash
868,000
$
retained earnings
$778,000
cash dividends payable
$778,000
cash dividends payable
$778,000
cash
$778,000
income summary
$3,448,700
retained earnings
$3,448,700
retained earnings
$248,500
common stock
35,500
$
paid-in capital-excess of par
$213,000
retained earnings
$919,950
cash dividends payable
$919,950
cash dividends payable
$919,950
cash
$919,950
during 2025 cash dividends
$250,000,000
preferred
Assumption A
$16,000,000
common stock
$320,000,000
Assumption B
$48,000,000
paid-in capital-excess of par, common
$960,000,000
preferred stock, 10%, nonparticipating
$160,000,000
paid-in capital-excess of par, preferred
$400,000,000
during 2025 cash dividends
$160,000,000
preferred
Assumption A
$17,000,000
common stock
$340,000,000
Assumption B
$51,000,000
paid-in capital-excess of par, common
$1,360,000,000
preferred stock, 10%, nonparticipating
$170,000,000
paid-in capital-excess of par, preferred
$340,000,000
common
234,000,000
$
noncumulative
preferred
common
202,000,000
$
cumulative
Current preference
$16,000,000
remainder to common
$234,000,000
allocation
$16,000,000
234,000,000
$
Assumption B
dividends in arrears:
2023
$16,000,000
2024
$16,000,000
current preference
$16,000,000
remainder to common
$202,000,000
allocation
$48,000,000
202,000,000
$
common
143,000,000
$
noncumulative
preferred
common
109,000,000
$
cumulative
Current preference
$17,000,000
remainder to common
$143,000,000
allocation
$17,000,000
143,000,000
$
Assumption B
dividends in arrears:
2023
$17,000,000
2024
$17,000,000
current preference
$17,000,000
remainder to common
$109,000,000
allocation
$51,000,000
109,000,000
$
Assumption A
Assumption A
total
$250,000,000
($16,000,000)
$234,000,000
($234,000,000)
$0
$250,000,000
($16,000,000)
($16,000,000)
($16,000,000)
$202,000,000
($202,000,000)
$0
total
$160,000,000
($17,000,000)
$143,000,000
($143,000,000)
$0
$160,000,000
($17,000,000)
($17,000,000)
($17,000,000)
$109,000,000
($109,000,000)
$0
