Finishing Touches has two classes of stock authorized: 8%, $10 par preferred, an

Question

Finishing Touches has two classes of stock authorized: 8%, $10 par preferred, and $1 par value common. The following transactions affect stockholders' equity during 2015, its first year of operations: January 2 Issues 100,000 shares of common stock for $31 per share. February 6 Issues 2,600 shares of 8% preferred stock for $12 per share. September 10 Repurchases 10,000 shares of its own common stock for $36 per share. December 15 Reissues 5,000 shares of treasury stock at $41 per share. In its first year of operations, Finishing Touches has net income of $156,000 and pays dividends at the end of the year of $95,000 ($1 per share) on all common shares outstanding and $2,080 on all preferred shares outstanding. Required: Prepare the stockholders' equity section of the balance sheet for Finishing Touches as of December 31, 2015. (Amounts to be deducted should be indicated by a minus sign.) what will the stockholders equity of the balance sheet resemble

Explanation / Answer

B:Stockholder equity resemble =$ 3,035,120

Common stock issued = 100,000 * 1 par 100,000 Additonal paid in capital -Common stock   (100,000 * (31-1) 3,000,000 Preferred stock    (2600*10 par) 26,000 Additonal paid in capital -preferred stock (2600 * (12-10) 5200 ADditional paid in capital -treasury stock (5000* [41-36] 25000 Retained earnings    [156000-95000-2080] 58920 less:Treasury stock = [10000-5000issued] *36 (180,000) stockholder equity 3,035,120

Related Questions

Navigate

• Browse (All)
• Browse F
• Subjects

---

---

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