ACCT 323 – Stockholder’s Equity Project – 100 Points

Due April 27th at Midnight EST

Shown below is the stockholders' equity section of Flamingo Corporation's balance sheet at
December 31, 2020:

Flamingo Corporation  
Statement of Stockholder's Equity  
December 31, 2020  
   
Common stock, $3 par value, 200,000 shares authorized, ____ shares
$360,000
issued and _____ outstanding
Additional paid in capital – common stock $400,000
Additional paid in capital – stock options $42,000
Total Paid in Capital $760,000
Retained Earnings $1,600,000
Less: Treasury Stock (10,000 shares) ($295,000)
Total Stockholder’s Equity $2,065,000
   

Consider the following events in preparing a Statement of Stockholder’s Equity and earnings per
share for the year 2021.

On January 1, 2019, the company granted 4 executive employees the option

to purchase 12,000 shares (3,000 shares each) of common stock at $12 per
share. The Black-Scholes option pricing model determines total
compensation expense to be $63,000. The option becomes exercisable on
December 31, 2021, after the employee completed three years of service. The
1/1/20 market price of the company’s stock was $18 on January 1, 2019 and $30 on
December 31, 2020

1/31/21 One of the executives who was granted the above options was fired and left
the company.
The company issued 1,000 shares of $3 par common stock in exchange for
1/31/21 land. Although several real estate appraisers disagree on the value of the land
in a range from $30,000 to $34,500, the company’s stock is currently selling
on a stock exchange for $31 per share.

4/1/21 The company purchased 2,000 common shares of treasury stock at $34 per
share.

5/1/21 The company reissued 8,000 shares of the treasury stock at $37 per share.
 ACCT 323 – Stockholder’s Equity Project – 100 Points
Due April 27th at Midnight EST

6/1/21 The company reissued 2,600 shares of treasury stock at $32 per share.

The company issued 3,000 shares of 5% cumulative convertible preferred

7/1/21 stock, $100 par value, for $108 per share. Each share is convertible into 3
shares of common stock.

12/1/21 The company declared a 10% stock dividend to all common stockholders of
record. The market value of the common stock is $36 per share

12/20/21 The board of directors declared the preferred stock dividend and a dividend
of $.5 per share on the common stock.

12/31/21
The market value of the company's common stock is $40 per share

The company’s net income for 2021 is $1,235,000 -- BEFORE any of the above transactions.

Complete the following in EXCEL prepared in GOOD FORM and using formulas. Organize your
analysis appropriately to:

 Prepare the company's Statement of Stockholder's Equity in good form (75 points)

 Compute Earnings per Share (25 points)

Your grade will be based on how well you organize your excel file and prepare a professionally formatted
analysis. The process and the format of your analysis is weighted as heavily as preparing the correct
numbers.

If your group needs to make any assumptions, clearly list out those assumptions. Where your group must
decide upon the way to treat a certain issue, clearly list out the ASC section you used to support your
answer and provide an explanation describing how you came to that conclusion. (You can do this in excel
so it is all in one file.)

Your group has been assigned in TEAMS. Work on this project must take place in TEAMS. All
communications and work on files should be in TEAMS. I will look for communication and participation
from each group member. If a group member is not participating in discussions and preparation of the
analysis, that group member will receive a lesser grade than the others.

Once your group has completed the project, please submit your final excel report in blackboard learn by
April 27th at midnight EST. Only one group member needs to submit the file.