Power Drive Corporation designs and produces a line of golf equipment and golf a

Question

Power Drive Corporation designs and produces a line of golf equipment and golf apparel. Power Drive has 100,000 shares of common stock outstanding as of the beginning of 2015. Power Drive has the following transactions affecting stockholders' equity in 2015. Power Drive Corporation has the following beginning balances in its stockholders' equity accounts on January 1, 2015: Common Stock, $100,000; Additional Paid-in Capital, $3,900,000; and Retained Earnings, $1,400,000. Net income for the year ended December 31, 2015, is $540,000. Required: Prepare the stockholders' equity section of the balance sheet for Power Drive Corporation as of December 31, 2015. (Amounts to be deducted should be indicated by a minus sign.)

Explanation / Answer

Cash 2254000 Common stock 49000 Paid-in Capital 2205000 Treasury stock 215600 Cash 215600 Cash dividend 173520 Dividend payable 173520 (49000-4400+100000 =144600 shares) Dividend payable 173520 CAsh 173520 Cash 118800 Treasury stock 107800 Additional paid-in capital 11000 Stockholders' equity Common stock 146,800 shares of $1 par issued 146800 Additional paid-in capital - common stock 6105000 Additional paid-in capital - treasury stock 11000 Retained earnings opening 1400000 540000 Add net Income 540000 Less dividend 173520 1766480 less Treasury stock 107800 Stockholders' equity 8461480

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