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  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...

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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!

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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

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