11.11 points Inside Incorporated was issued a charter on January 15 authorizing

Question

11.11 points Inside Incorporated was issued a charter on January 15 authorizing the following capital stock: Common stock, $6 par, 100,000 shares, one vote per share. Preferred stock, 7 percent, par value $10 per share, 5,000 shares, nonvoting, The following selected transactions were completed during the first year of operations in the order giver a. Issued 20,000 shares of the $6 par common stock at $18 cash per share. b. Issued 3,000 shares of preferred stock at $22 cash per share. c. At the end of the year, the accounts showed net income of $38,000. Required 1. Prepare the stockholders' equity section of the balance sheet at December 31. INSIDE INCORPORATED Balance Sheet (Partial) At December 31 Stockholders' Equity Contributed Capital: Preferred Stock Total Contributed Capital Total Stockholders' Equity 2. Assume that you are a common stockholder of Inside Incorporated. If the company needed additi

Explanation / Answer

Prepare stockholder's equity section :

Contributed capital Common stock 120000 Paid in capital in excess of par value-common stock 240000 Preferred stock 30000 Paid in capital in excess of par value-Preferred stock 36000 Total contributed capital 426000 Retained earnings 38000 Total stockholder's equity 464000

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