specialty auto racing inc. retails racing products BMW, porsches,and ferraris. t

Question

specialty auto racing inc. retails racing products BMW, porsches,and ferraris. tge following accounts and their balances appear in the ledger of specialty auto racing Inc om July 31 the end of the current year: common stock,$36 par $10,080,000
paid in capital from sale of treasury sick-common$340,000
paid in capital in excess of par-common stock:420,000
paid in capital in excess of par-preferred stock:384,000
preferred 1% stock,$150 par $7,200,000
retained earnings $71,684,000
treasury stock-common $1,008,000
fifty thousand shares of preferred and 300,000 shares of common stock are authorized. there are 24,000 shares of common stock held as treasury stock.
prepare the stockholders equity section of the balance sheet as if July 31 the end of the current year using method 1 of exhibit 8.

Explanation / Answer

STOCKHOLDERS' EQUITY SECTION Paid in capital: Preferred 1% stock, $150 par, 50000 shares authorized, 48000 shares issued. 7200000 Paid in capital in excess of par 384000 7584000 Common stock, $36 par, 300000 shares authorized, 280000 shares issued. 10080000 Paid in capital in excess of par 420000 10500000 Paid in capital from sale of treasury stock 340000 Total paid in capital 18424000 Retained earnings 71684000 Total 90108000 Less: Treasury stock, Common stock (24000 shares) 1008000 Total stockholders' equity 89100000

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