2.00 points Quick Fix-It Corporation was organized at the beginning of this year

Question

2.00 points Quick Fix-It Corporation was organized at the beginning of this year to operate several car repair businesses in a large metropolitan area. The charter issued by the state authorized the following stock: Common stock, $19 par value, 99,700 shares authorized Preferred stock, $47 par value, 8 percent, 59,600 shares authorized During January and February of this year, the following stock transactions were completec a. Sold 79,300 shares of common stock at $38 cash per share b. Sold 21,100 shares of preferred stock at $60 cash per share c. Bought 5,800 shares of common stock from a current stockholder for $12 cash per share Required Net income for the year was $90,600; cash dividends declared and paid at year-end were $31,700. 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.) QUICK FIX Balance Sheet (Partial) At December 31, This Contributed Capital: Total contributed capital Total contributed capital and retained eamings

Explanation / Answer

Solution: QUICK FIX-IT CORPORATION Balance Sheet (Partial) At December 31, This year Stockholders’ equity: Contributed capital: Common stock 1,506,700 Preferred stock 991,700 Additional paid-in capital, common stock 1,506,700 Additional paid-in capital, preferred stock 274,300 Total contributed capital 4,279,400 Retained earnings 58,900 Total contributed capital and retained earnings 4,338,300 Treasury stock -69,600 Total stockholders’ equity 4,268,700 Working Notes: QUICK FIX-IT CORPORATION Balance Sheet (Partial) At December 31, This year Stockholders’ equity: Contributed capital: Common stock                  1,506,700 [79,300 x $19] Preferred stock                     991,700 [21,100 x 47] Additional paid-in capital, common stock                  1,506,700 [79,300 x (38-19)] Additional paid-in capital, preferred stock                     274,300 [21,100 x (60-47)] Total contributed capital Retained earnings                        58,900 [90,600 - 31,700] Total contributed capital and retained earnings                  4,338,300 Treasury stock -69,600 [5,800 x 12 ] Total stockholders’ equity 4,268,700 Please feel free to ask if anything about above solution in comment section of the question.

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