Table 14-2
Following Is the Shareholders' Equity Section of the Balance

question 99

Multiple Choice

Table 14-2
Following is the shareholders' equity section of the balance sheet of Thomson Corporation:
$$\begin{array} { | l | r | } \hline \text { Contributed capital } & \\\hline \text { Preferred shares, } \$ 8 , \text { cumulative, } 25,000 \text { shares } & \\\hline \text { authorized, } 5,000 \text { shares issued } & \$ 516,000 \\\hline \text { Common shares, } 100,000 \text { shares authorized, } 40,000 & \\\hline \text { shares issued } & \underline { 320,000 } \\\hline \text { Total contributed capital } & 836,000 \\\hline \text { Retained earnings } & \underline { 290,000 } \\\hline \text { Total shareholders' equity } & \$ 1,126,000 \\\hline\end{array}$$ The preferred shares are currently selling for $102.25 per share and the common shares are currently selling for $11.50 per share.
-Refer to Table 14-2.The total shareholders' equity after the distribution of a 10% common stock dividend is:

• A) $1,152,000
• B) $1,146,000
• C) $1,126,000
• D) $1,172,000

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Definitions:

Perpetual

An inventory system in which the inventory records are updated continuously to reflect purchases, sales, and inventory on hand in real time.

LIFO Method

An inventory costing method where the last items of inventory purchased are the first ones sold, used to calculate cost of goods sold and ending inventory.

Inventory Ledger

A detailed record that tracks the quantities and costs of all types of inventory a company has in stock during a specific period.

Weighted-Average Method

Valuing of inventory where each item is assigned the same unit cost. This unit cost is found by dividing the cost of goods available for sale by the total number of units for sale.