eezt.mheducation.com/hmtpx 3· 4.00 points E11-4 Reporting the Stockholders\' Equ

Question

eezt.mheducation.com/hmtpx 3· 4.00 points E11-4 Reporting the Stockholders' Equity Section of the Balance Sheet LO 11-2, LO 11-3, LO 11-4] Shalby Corparation was organd in January to aparata an Tha chartaraed hy tha stata auherized tha tolowing captal stock Common stock, 31 par velue, 200,000 shares Preferred stock. $10 par value 6 percent, 50,000 shares During aruary and Fetuary, the following ztock transacions were completed: Not income ior the year w2s $53.000; casn chidends declared and paid Year cnd ware $10,000. Balance Shoet (Partial) Stockhalders Equity loal Contriouted Capital Total Stockholer Equib Hints References eBcok & Resources O lype hene to search

Explanation / Answer

SHELBY CORPORATION Balance Sheet (Partial) At December 31 Stockholders' Equity Contributed capital: Preferred stock $        150,000 Additional paid-in capital, preferred stock            300,000 Common stock              20,000 Additional paid-in capital, common stock            380,000 Total contributed capital            850,000 Retained earnings              40,000 Total stockholders' equity $        890,000 Explanation: Preferred stock, 6%, par $10, authorized 50,000 shares, issued and outstanding, 15,000 shares Additional paid-in capital, preferred stock: $300,000 = ($30 – $10 par) × 15,000 shares Common stock, par $1, authorized 200,000 shares, issued and outstanding, 20,000 shares Additional paid-in capital, common stock: $380,000 = ($20 – $1 par) × 20,000 shares (400000÷20000 = $20 per share) Retained earnings ($50,000 – $10,000 = $40,000)

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