Tandy Company was issued a charter by the state of Indiana on January 15 of this
ID: 2592137 • Letter: T
Question
Tandy Company was issued a charter by the state of Indiana on January 15 of this year. The charter authorized the following:
Common stock, $8 par value, 115,000 shares authorized
Preferred stock, 15 percent, par value $6 per share, 5,200 shares authorized
During the year, the following transactions took place in the order presented:
a. Sold and issued 21,400 shares of common stock at $12 cash per share.
b. Sold and issued 2,000 shares of preferred stock at $16 cash per share.
c. At the end of the year, the accounts showed net income of $41,000. No dividends were declared.
Required:
1. Prepare the stockholders’ equity section of the balance sheet at the end of the year.
TANDY, INCORPORATED
Balance Sheet (Partial)
At December 31, this year
Stockholders’ equity:
Contributed capital:
Common stock
?
Preferred stock
?
Additional paid-in capital, common stock
?
Additional paid-in capital, preferred stock
?
Total contributed capital
Retained earnings
?
Total stockholders’ equity
TANDY, INCORPORATED
Balance Sheet (Partial)
At December 31, this year
Stockholders’ equity:
Contributed capital:
Common stock
?
Preferred stock
?
Additional paid-in capital, common stock
?
Additional paid-in capital, preferred stock
?
Total contributed capital
Retained earnings
?
Total stockholders’ equity
Explanation / Answer
The stockholders’ equity section of the balance sheet at the end of the year TANDY, INCORPORATED Balance Sheet (Partial) At December 31, this year Stockholders Equity : Contributed Capital : Common stock (21400 shares * $8) $171,200 Preferred stock (2000 shares * $6) $12,000 Additional Paid in Capital , Common stock (21400 shares * $4) $85,600 Additional Paid in Capital , Preferred stock (2000 shares * $10) $20,000 Total Contributed Capital $288,800 Retained Earnings $41,000 Total Stockholders Equity $329,800
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