Finishing Touches has two classes of stock authorized: 7%, $10 par preferred, an

Question

Finishing Touches has two classes of stock authorized: 7%, $10 par preferred, and $1 par value common. The following transactions affect stockholders' equity during 2015, its first year of operations January 2 February 6 September 10 December 15 Issues 100,000 shares of common stock for $30 per share Issues 2,500 shares of 7% preferred stock for $13 per share Repurchases 12,000 shares of its own common stock for $35 per share Reissues 6,000 shares of treasury stock at $40 per share In its first year of operations, Finishing Touches has net income of $155,000 and pays dividends at the end of the year of $94,000 (S1 per share) on all common shares outstanding and $1,750 on all preferred shares outstanding Required Prepare the stockholders' equity section of the balance sheet for Finishing Touches as of December 31 2015. (Amounts to be deducted should be indicated by a minus sign.) Answer is not complete FINISHING TOUCHES Balance Sheet (Stockholders' Equity Section) December 31,2015 Stockholders' equity: Preferred stock Common stock Additional paid-in capital 25,000 100,000 Total paid-in capital Retained earnings Treasury stock 125,000 59.250 (210,000) Total stockholders' equity $ (25,750)

Explanation / Answer

Additional paid in capital from common shares issued (100,000*$29) $ 2,900,000 Additional paid in capital from preferred shares issued (2,500*$3) $          7,500 Additional paid in capital from issue of treasury stock (6,000*$5) $        30,000 Total additional paid in capital $ 2,937,500

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