act5725 The stockholders\' equity of Verrecchia Company at December 31, 2016, fo
ID: 2580093 • Letter: A
Question
act5725
The stockholders' equity of Verrecchia Company at December 31, 2016, follows:
During 2017, the following transactions occurred:
Jan. 5 Issued 10,000 shares of common stock for $13 cash per share.
Jan. 18 Repurchased 4,000 shares of common stock at $16 cash per share.
Mar. 12 Sold one-fourth of the treasury shares acquired January 18 for $19 cash per share.
July 17 Sold 500 shares of treasury stock for $14 cash per share.
Oct. 1 Issued 5,000 shares of 8%, $25 par value preferred stock for $36 cash per share. This is the first issuance of preferred shares from the 50,000 authorized preferred shares.
(a) Use the financial statement effects template to indicate the effects of each transaction.
Use negative signs with answers, when appropriate.
Balance Sheet
Contributed
Capital
Earned
Capital
Income Statement
Net
Income
(b) Prepare the December 31, 2017, stockholders' equity section of the balance sheet assuming that the company reports net income of $76,900 for the year.
Use a negative sign with your answer for treasury stock.
Common stock, $5 par value, 500,000 shares authorized; 350,000 shares issued and outstanding $1,750,000 Paid-in capital in excess of par value 800,000 Retained earnings 634,000Explanation / Answer
Transaction Cash non cash liabilities contributed Earned revenue expense net Asset asset capital capital income 5-Jan 130000 50,000-CS 80,000-Additional 18-Jan -64000 -64,000 TS 12-Mar 19000 16000 TS 3,000 Additional -TS paid in capital 17-Jul 7000 8000 Treasury stock -1,000 Additional -TS paid in capital 1-Oct 180000 125000 preferred stock 55000 addition paid in capital-PS Stockholders Equity paid in capital 8% preferred stock ,$25 par value ,50,000 shares authorized ,5000 125,000 shares issued and outstanding common stock ,$5 par value ,500,000 shares authorized ;360,000 shares issued 1800000 1,925,000 Additional paid in capital paid in capital in excess of par value-PS 55,000 paid in capital in excess of par value-CS 880,000 paid in capital in excess of par value -TS 2,000 937,000 total paid in capital 2,862,000 Retained earnings 710900 3,572,900 less:treasury stock (2500)shares at cost -40,000 total stockholders Equity 3,532,900
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