Exercise 10-7 Prepare the stockholders equity section (LO7) Finishing Touches ha

Question

Exercise 10-7 Prepare the stockholders equity section (LO7)

Finishing Touches has two classes of stock authorized: 7%, $10 par preferred, and $1 par value common. The following transactions affect stockholders' equity during 2015, its first year of operations:

In its first year of operations, Finishing Touches has net income of $149,000 and pays dividends at the end of the year of $94,000 ($1 per share) on all common shares outstanding and $1,330 on all preferred shares outstanding.

Prepare the stockholders' equity section of the balance sheet for Finishing Touches as of December 31, 2015.

Finishing Touches has two classes of stock authorized: 7%, $10 par preferred, and $1 par value common. The following transactions affect stockholders' equity during 2015, its first year of operations:

Explanation / Answer

Stockholder' Equity Section: Paid in capital Common Stock (94000 shares @ 1 per share) 94,000 Preferred Stock (1900 shares @ $10 per preferred share) 19,000 Additional Paid in capital: Common stock (100,000*23+6000*5) 2330000 Preferred Stock (1900*3) 5700 Total Additional paid in capital 2,335,700 Total Paid in capital 2,448,700 Add: Retained earnings (149000-94000-1330) 53,670 Subtotal 2,502,370 Less: Treasury Stock (6000 shares @29) -174000 STOCKHOLDER'S EQUITY 2,328,370

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.