16 The stockholders\' equity section of Kay Corporation at December 31, 2005 inc

Question

16

The stockholders' equity section of Kay Corporation at December 31, 2005 included the following accounts:

Preferred stock (9%, $40 par, 6,000 shares issued & outstanding) ........ $240,000

Common stock ($8 par, 65,000 shares issued, 61,000 shares outstanding) .. 520,000

Paid-in capital – preferred stock ....................................... ?

Paid-in capital – common stock .......................................... 584,000

Retained earnings ....................................................... 152,000

Treasury stock (4,000 shares at $15 cost) .............................. 60,000

Kay Corporation reported a net income of $84,000 during 2005 and only dividends on preferred stock were declared and paid. Calculate the retained earnings balance at January 1, 2005. Do not use decimals in your answer.

Explanation / Answer

Retained Earnings on 31 dec ,2005 = $152,000
Add: Preferred Dividend (6000 x $40 x 9%) = $21,600
Less: Net Income - $84,000
Retained earnings balance at Jan 1, 2005 $89,600

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

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