United Resources Company obtained a charter from the state in January of this ye
ID: 2566196 • Letter: U
Question
United Resources Company obtained a charter from the state in January of this year. The charter authorized 209,000 shares of common stock with a par value of $3. During the year, the company earned $482,000 Also during the year, the following selected transactions occurred in the order given: a. Sold 81,000 shares of the common stock in an initial public offering at $19 cash per share. b. Repurchased 26,000 shares of the previously issued shares at $22 cash per share. c. Resold 9,000 of the shares of the treasury stock at $25 cash per share. Required: Prepare the stockholders' equity section of the balance sheet at the end of the year. (Amounts to be deducted should be indicated with a minus sign.) UNITED RESOURCES COMPANY Balance Sheet (Partial) At December 31, This year Stockholders' equity Contributed capital: Total contributed capital Total contributed capital and retained earnings Total stockholders' equityExplanation / Answer
Stockholder’s Equity
Stockholder’s Equity:
Contributed Capital:
Common Stock of 81,000 shares at par value of $3 per share
243,000
Premium paid on 81,000 shares
1,296,000
Resold of Treasury stock
225,000
Total Contributed Capital
1,764,000
Retained earnings
0
Net income earned during the year
482,000
Total contributed capital and retained earnings
482,000
Repurchase of shares at par value
(26,000 x $3)
-78,000
Excess amount paid over and above par value for repurchase
(26,000 x $19)
-494,000
Total Stockholder’s Equity
1,674,000
Stockholder’s Equity:
Contributed Capital:
Common Stock of 81,000 shares at par value of $3 per share
243,000
Premium paid on 81,000 shares
1,296,000
Resold of Treasury stock
225,000
Total Contributed Capital
1,764,000
Retained earnings
0
Net income earned during the year
482,000
Total contributed capital and retained earnings
482,000
Repurchase of shares at par value
(26,000 x $3)
-78,000
Excess amount paid over and above par value for repurchase
(26,000 x $19)
-494,000
Total Stockholder’s Equity
1,674,000
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