On January 1, 2017, Metlock, Inc. had these stockholders equity balances. Common

Question

On January 1, 2017, Metlock, Inc. had these stockholders equity balances. Common Stock, $1 par (2,000,000 shares authorized, 625,000 shares issued and outstanding) Paid-in Capital in Excess of Par Value Retained Earnings Accumulated Other Comprehensive Income $625,000 1,530,000 694,000 63,000 During 2017, the following transactions and events occurred. 1. Issued 54,500 shares of $1 par value common stock for $2 per share. 2. Issued 63,000 shares of common stock for cash at $5 per share. 3 Purchased 21,400 shares of common stock for the treasury at $3.25 per share. 4. Declared and paid a cash dividend of $202,500. 5. Earned net income of $413,500. 6. Had other comprehensive income of $19,000. Prepare the stockholders' equity section of the balance sheet at December 31, 2017. METLOCK, INC. Partial Balance Sheet

Explanation / Answer

PARTLY BALANCE SHEET December 31 , 2017 Stockholder's Equity Paid in Capital Capital Stock Common Stock (742,500 Shares of $ 1) (Note 2) $                           7,42,500 Paid in Capital in Excess of Par Value - Common Stock (Note 2) $                         18,36,500 Total Paid in Capital $                    25,79,000 Retained Earnings (Note 1) $                      9,05,000 Total of Paid in capital and retained Earning $                    34,84,000 Add: Accumulated other comprehensive Income ($ 63,000 + $ 19,000) $                          82,000 Less: Treasurry Stock (21,400 Shares X $ 3.25 per shares) $                          69,550 Total Stockholer's Equity $                    34,96,450 Working Note 1: CALCULATION OF THE CLOSING RETAINED EARNINGS Opening Retained Earnings= $                           6,94,000 Add: Net Income of the year $                           4,13,500 Total $                         11,07,500 Less: Dividend Declared and paid Common shares Dividend   $                           2,02,500 Closing Balance $                           9,05,000 Working Note 2: CALCLATION OF THE SHARE CAPITAL Par Value   Paid in capital Excess of par value Opening Share Capital= $                           6,25,000 $                    15,30,000 Add: Issued 54,500 Shares for $ 2 Per Shares $                               54,500 $                          54,500 (54,500 Shares X $ 1) (54,500 Shares X $ 1) Add: Issued 63,000 Shares for $ 5 per shares $                               63,000 $                      2,52,000 (63,000 Shares X $ 1) (63,000 Shares X $ 4) Closing balance $                           7,42,500 $                    18,36,500

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