Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. a company has two classes of stock authorized: 8%,

A company has two classes of stock authorized: 8%, $10 par preferred, and $1 par...

70.2K

Verified Solution

Question

Accounting

A company has two classes of stock authorized: 8%, $10 par preferred, and $1 par value common. The following transactions affect stockholders' equity during Year 1, its first year of operations:

January 2 Issues 100,000 shares of common stock for $17 per share.
February 6 Issues 1,200 shares of 8% preferred stock for $12 per share.
September 10 Purchases 10,000 shares of its own common stock for $22 per share.
December 15 Resells 5,000 shares of treasury stock at $27 per share.

In its first year of operations, the company has net income of $142,000 and pays dividends at the end of the year of $95,000 ($1 per share) on all common shares outstanding and $960 on all preferred shares outstanding.

Required: Prepare the stockholders' equity section of the balance sheet for the company as of December 31, Year 1. (Amounts to be deducted should be indicated by a minus sign.) Show your work!

image

Balance Sheet (Stockholders' Equity Section) December 31, Year 1 Stockholders' equity: Preferred stock Common stock Additional paid-in capital 0 Total paid-in capital Retained earnings Treasury stock Total stockholders' equity $ 0

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Accounting
1.2K views

1. Which of the following entities appears not to be a going concern? a. Company M’s management...

Basic Math
1.2K views

(2x−y3−yex)dx=(2+ex+3xy2 )dy, y(0)=2. Solve the initial value problem and verify exact.

Statistics
1.2K views

An electric company received a shipment of several thousand resistors with 100 ohm ratings. A sample...

Biology
1.2K views

3)   In enzyme kinetics why does the initial reaction rate (vo) resemble the steady state in...

Biology
1.2K views

Our personality remains largely stable throughout True O False our lives

Geometry
1.2K views

3x X 1 60 2X 6 30 1313

Calculus
1.2K views

1 Differentiate a f x esinx e f x ln 6x the following functions Do...

Accounting
1.2K views

I need help filling out part 2 Pina Colada...

Accounting
1.2K views

Prepare the consolidated balance sheet at 12/31/xx by placing the appropriate entries in their respective...

Accounting
1.2K views

Assume that on 1 January 2017 X has a patent (limited life) on how to...

Accounting
1.2K views

Explain how the companies Act at Schedule 9 protects employees of a company that has...

Accounting
1.2K views

Which of the following costs, if expressed on a per unit basis, would be expected...