P11-2 Preparing the Stockholders Equity Section of the Balance Sheet LO11-3, 11-
ID: 2655120 • Letter: P
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P11-2 Preparing the Stockholders Equity Section of the Balance Sheet LO11-3, 11-7 Witt Corporation received its charter during January 2014. The charter authorized the following capital stock: Preferred stock: 10 percent, par $10, authorized 21,000 shares Common stock: par $8, authorized 50,000 shares. During 2014, the following transactions occurred in the order given: a. Issued a total of 40,000 shares of the common stock to the four organizers at $12 per share. b. Sold 5,500 shares of the preferred stock at $16 per share. c. Sold 3,000 shares of the common stock at $15 per share and 1,000 shares of the preferred stock at $26. d. Net income for the year was $96,000. Required: Prepare the Stockholders’ Equity section of the balance sheet at December 31, 2014. Possible input areas are shaded. WITT CORPORATION Balance Sheet (Partial) At December 31, 2014 Stockholders’ equity: Contributed capital: Total contributed capital 639,000 Total stockholders’ equity P11-2 Preparing the Stockholders Equity Section of the Balance Sheet LO11-3, 11-7 Witt Corporation received its charter during January 2014. The charter authorized the following capital stock: Preferred stock: 10 percent, par $10, authorized 21,000 shares Common stock: par $8, authorized 50,000 shares. During 2014, the following transactions occurred in the order given: a. Issued a total of 40,000 shares of the common stock to the four organizers at $12 per share. b. Sold 5,500 shares of the preferred stock at $16 per share. c. Sold 3,000 shares of the common stock at $15 per share and 1,000 shares of the preferred stock at $26. d. Net income for the year was $96,000. Required: Prepare the Stockholders’ Equity section of the balance sheet at December 31, 2014. Possible input areas are shaded. WITT CORPORATION Balance Sheet (Partial) At December 31, 2014 Stockholders’ equity: Contributed capital: Total contributed capital 639,000 Total stockholders’ equityExplanation / Answer
WITT CORPORATION
BALANCE SHEET (Partial) as at 31st Dec 2014
Stockholder’s Equity: Amt in $
Authorised Capital Common Stock par @ $8 400,000
50,000 nos
Preferred stock 10% , par @$10, 21,000 nos 210,000
Total Authorised share capital : 610,000
Issued and Subscribed:
43,000 common stock $8 par value 344,000
6,500 10% preferred stock 65,000
Total share capital : 409,000(A)
Reserve and surplus:
Share premium on common stock 181,000
Premium on preferred stock 49,000
Total share premium (1+2) 230,000(B)
Total contributed Capital(A+B) 639,000
Carry forward from P&L A/C 96,000
WITT CORPORATION
BALANCE SHEET (Partial) as at 31st Dec 2014
Stockholder’s Equity: Amt in $
-
Authorised Capital Common Stock par @ $8 400,000
50,000 nos
-
Preferred stock 10% , par @$10, 21,000 nos 210,000
-
Total Authorised share capital : 610,000
Issued and Subscribed:
-
43,000 common stock $8 par value 344,000
-
6,500 10% preferred stock 65,000
-
Total share capital : 409,000(A)
Reserve and surplus:
-
Share premium on common stock 181,000
-
Premium on preferred stock 49,000
-
Total share premium (1+2) 230,000(B)
-
Total contributed Capital(A+B) 639,000
-
Carry forward from P&L A/C 96,000
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