United Resources Company obtained a charter from the state in January of this ye
ID: 2582155 • Letter: U
Question
United Resources Company obtained a charter from the state in January of this year. The charter authorized 209,000 shares of common stock with a par value of $3. During the year, the company earned $482,000 Also during the year, the following selected transactions occurred in the order given: a. Sold 81,000 shares of the common stock in an initial public offering at $19 cash per share. b. Repurchased 26,000 shares of the previously issued shares at $22 cash per share c. Resold 9,000 of the shares of the treasury stock at $25 cash per share Required 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.) UNITED RESOURCES COMPANY Balance Sheet (Partial) At December 31, This year Stockholders' equity: Contributed capital: Common stock S 243,000 1,296,000 225,000 1,764,000 Premium on bonds payable Treasury stock Total contributed capital Retained earnings Total contributed capital and retained earnings Common stock Additional paid-in capital Total stockholders' equity 482,000 2,246,000 (78,000) (494,000) $ 1,674,000Explanation / Answer
Solution:
Balance Sheet (Partial)
At December 31, This year
Stockholders' Equity:
Contributed Capital:
Common Stock (81,000 Shares x Par $3)
$243,000
Paid in Capital In Excess of Par - Common Stock (81,000 Shares x $16)
$1,296,000
Paid in Capital in excess of par - Treasury Stock (9,000 Shares x 3)
$27,000
Total Contributed Capital
$1,566,000
Retained Earnings
$482,000
Total Contributed Capital and retained earnings
$2,048,000
Less: Treasury Stock (26,000 - 9,000)*$22
($374,000)
Total Stockholders' Equity
$1,674,000
Balance Sheet (Partial)
At December 31, This year
Stockholders' Equity:
Contributed Capital:
Common Stock (81,000 Shares x Par $3)
$243,000
Paid in Capital In Excess of Par - Common Stock (81,000 Shares x $16)
$1,296,000
Paid in Capital in excess of par - Treasury Stock (9,000 Shares x 3)
$27,000
Total Contributed Capital
$1,566,000
Retained Earnings
$482,000
Total Contributed Capital and retained earnings
$2,048,000
Less: Treasury Stock (26,000 - 9,000)*$22
($374,000)
Total Stockholders' Equity
$1,674,000
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