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Frederick Mining Company
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Equity Section of Balance Sheet as of January 1, 2016
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Common stock, $10 par value, 200,000 shares authorized
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120,000 shares issued
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1,200,000
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Paid-in capital in excess of par value
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3,711,250
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Retained earnings
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4,651,255
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Total equity
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9,562,505
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Prepare an updated equity section of the balance sheet as of December 31, 2016.
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1/28/2016
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Frederick Mining enters into a loan-modification agreement with the bank, agreeing to appropriate $500,000 of retained earnings to loan repayment.
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2/15/2016
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Frederick Mining board of directors declares a $1.50-per-share dividend payable on 3/31/2016 to shareholders of record as of 3/15/2016. Frederick uses a dividends account to record dividends declared.
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3/31/2016
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Cash dividend declared on 2/15/2016 is paid.
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7/22/2016
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Frederick Mining board of directors declares a 10% stock dividend to be paid 8/15/2016 to shareholders of record as of 8/1/2016. The market value of the stock is $49 immediately prior to the declaration.
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8/15/2016
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Stock dividend declared on 7/22/16 is paid.
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9/18/2016
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Frederick Mining buys back 5,000 shares of company stock on the open market for $52 per share. The purchased shares are not retired but are held in treasury.
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12/31/2016
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Frederick Mining had the following income and expense account balance as of 12/31/2016. Close out income.
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Debit
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Credit
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Sales revenue
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6,890,000
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Cost of goods sold
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4,752,600
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Administrative salary expense
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436,500
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Office expense
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118,560
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Depreciation expense
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12,000
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Transportation expense
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18,400
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Interest expense
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82,800
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12/31/2016
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Close out dividends.
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