Accounting Liabilities and Equity Analysis for MST and ABC Corp.

This homework assignment presents a detailed accounting analysis focusing on the liabilities and equity of two corporations, MST Corp and ABC Corp. It outlines current and long-term liabilities for MST Corp as of December 31, 2002, including accounts payable, bonds payable, accrued interest, and tax obligations. The exercise further evaluates shareholder's equity for ABC Corp as of December 2003, detailing authorized capital, issued shares, retained earnings, and dividend arrears calculations. Additionally, the student provides a breakdown of liabilities and equity components, enhancing understanding of financial structures within corporations.

Running head: ACCOUNTING
Accounting
Name of the student
Name of the university
Author note

1ACCOUNTING
Table of Contents
Answer to Question 1.................................................................................................................2
Liabilities................................................................................................................................2
Answer to Question 2.................................................................................................................3
Equity.....................................................................................................................................3

2ACCOUNTING
Answer to Question 1
Liabilities
Liabilities for MST Corp for the period ended December 31, 2002
Particulars Amount
Current liabilities
Accounts payable 65,600.00
Accrued Liabilities 11,347.00
6% bonds payable, due Feb 1, 2003 100,000.00
8% bonds payable, due June 1, 2003 250,000.00
11% bonds payable, due June 1, 2012 300,000.00
Accrued interest payable 7,333.00
Notes payable 110,000.00
Income tax payable 17,300.00
Total current liabilities 861,580.00
Long-term liabilities
Deferred tax liability 130,000.00
Lease payment obligations - Capital lease 23,600.00
Pension obligation 410,000.00
Unfunded obligations for post retirement benefits 72,000.00
Total long-term liabilities 635,600.00

3ACCOUNTING
Answer to Question 2
Equity
1. Shareholder’s equity
Shareholder's equity of ABC Corp. as at December 2003
Particulars Amount
Authorised capital
100,000 preferred stock, € 100 each € 10,000,000.00
500,000 common stock, € 1 each € 500,000.00
Total authorised capital € 10,500,000.00
Issued capital
10,000 preferred stock, € 100 each € 1,000,000.00
330,000 common stock, € 1 each € 330,000.00
Total share capital € 1,330,000.00
Add: Retained earnings € 777,500.00
Shareholder's equity € 2,107,500.00
Calculation of retained earnings
Total earnings € 1,025,000.00
Less: Dividend paid € 247,500.00
Retained earnings € 777,500.00
2. Dividend in-arrear
The preferred stock pays 8% dividend on the preferred stock which is due as on
December 2003. The dividend is payable on the issued preferred stock which is 10,000 shares
for ABC Corp. Therefore, the dividend in – arrear will be amounted to (10,000 * € 100 * 8%)
= € 80,000.