90.2K

Verified Solution

Link Copied!

Required information

Problem $10-5$A $($Static$)$ Understand stockholders' equity and the statement of stockholders' equity $($LO$10-$

$[$The following information applies to the questions displayed below.$]$

Donnie Hilfiger has two classes of stock authorized: $$1$ par preferred and $$0\mathrm{.}01$ par value common. As of the beginning of

$2024,300$ shares of preferred stock and $4,000$ shares of common stock have been issued. The following transactions

affect stockholders' equity during $2024$:

March $1$ Issue $1,100$ shares of common stock for $$42$ per share.

May $15$ Purchase $400$ shares of treasury stock for $$35$ per share.

July $10$ Resell $200$ shares of treasury stock purchased on May $15$ for $$40$ per share.

October $15$ Issue $200$ shares of preferred stock for $$45$ per share.

December $1$ Declare a cash dividend on both common and preferred stock of $$0\mathrm{.}50$ per share to all

stockholders of record on December $15.($Hint: Dividends are not paid on treasury stock.$)$

December $31$ Pay the cash dividends declared on December $1.$

Donnie Hilfiger has the following beginning balances in its stockholders' equity accounts on January $1,2024$: Preferred

Stock, $$300$; Common Stock, $$40$; Additional Paid$-$in Capital, $$76,000$; and Retained Earnings, $$30,500.$ Net income for

the year ended December $31,2024,$ is $$10,800.$

Taking into consideration the beginning balances on January $1,2024$ and all the transactions during $2024,$ respond to the

following for Donnie Hilfiger:

Problem $10-5$A $($Static$)$ Part $1$

Required:

Prepare the stockholders' equity section of the balance sheet as of December $31,2024.($Amounts to be deducted should be

indicated by a minus sign.$)$

Answer & Explanation Solved by verified expert

See Answer