Chapter 12 Corporations: Organization, Stock Transactions, and Dividends 595 EX

Question

Chapter 12 Corporations: Organization, Stock Transactions, and Dividends 595 EX 12-21 Stockholders' Equity section of balance sheet Obj. 6 ed total List the errors in the following Stockholders' Equity section of the balance sheet prepared as s'equity of the end of the current year: Stockholders' Equity Paid-in capital: Preferred 2% stock, $80 par (125,000 shares authorized and issued). . .. Excess of issue price over par 10,000,000 500,000 . . . . . . . . . . .. . $ 10,500,000 96,700,000 1,755,000 430,000 109,385,000 Retained earnings.... Common stock, $20 par (1,000,000 shares authorized, 825,000 shares issued) Organizing costs 17,655,000 300,000 $127,340,000 .

Explanation / Answer

Solution:

Stockholders’ Equity Preferred 2% stock, $80 par (125,000 shares authorized and issued) 10,000,000 Excess of issue price over par 500,000 10,500,000 Common stock, $20 par (1,000,000 shares authorized, 825,000 shares issued) 16,500,000 Excess of issue price over par 1,155,000 17,655,000 Total paid-in capital 28,155,000 Retained earnings (=96700000-3000000 96,400,000 Total 124,555,000 Minus treasury stock (75,000 shares at cost) 1,755,000 Total stockholders’ equity 122,800,000

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