Question

Part 1 of 2 Required information Problem 10-5A Understand stockholders' equity and the statement of stockholders' equity (L010-7) (The following information applies to the questions displayed below) Donnie Hilfiger has two classes of stock authorized: $1 par preferred and $0.01 par value common. As of the beginning of 2021, 300 shares of preferred stock and 3100 shares of common stock have been issued. The following transactions affect stockholders' equity during 2020 1 T 1,100 shares of common stock for 3 per share. 15 Purchase 400 shares of treasury atok for 326 per share. July 10 Resell 200 shares of treasury to purchased May 15 for $31 per share. Otober 15 to 200 shares of preterred to for 36 share. December are ca dividendo both and preferred stock of 30.00 per share to all stockholders of record on December 15. Nini Dividends are not paid on treasury stock.) December 31 Pay the cash dividende declared on December 1. Donnie Hilfiger has the following beginning balances in its stockholders' equity accounts on January 1, 2021 Preferred Stock. $300, Common Stock $3t Additional Paid in capital, $67,000, and Retained Earnings. $26,000. Net Income for the year ended December 31, 2021, is $9.900. Taking into consideration the beginning balances on January 1 2021 and all the transactions during 2021, respond to the following for Donnie Hilfiger Problem 10-5A Part 1

Answer 1

Solution:

Donnie Hilfiger
Statement of Stockholder's Equity
For the year ended December 31, 2021
Particulars	Preferred Stock	Common Stock	Additional Paid in Capital	Retained Earnings	Treasury Stock	Total Stockholder's Equity
Balance, January 1	$300.00	$31.00	$67,000.00	$26,000.00	$0.00	$93,331.00
Issue of common stock		$11.00	$36,289.00			$36,300.00
Purchase of Treasury Stock					-$10,400.00	-$10,400.00
Sale of Treasury stock			$1,000.00		$5,200.00	$6,200.00
Issued Preferred stock	$200.00		$7,000.00			$7,200.00
Dividends				-$3,600.00		-$3,600.00
Net Income				$9,900.00		$9,900.00
Balance, December 31	$500.00	$42.00	$111,289.00	$32,300.00	-$5,200.00	$138,931.00

Donnie Hilfiger
Balance Sheet - Stockholder's Equity Section
31-Dec-21
Particulars	Amount
Stockholders Equity:
Common stock	$42.00
Preferred Stock	$500.00
Additional paid in capital	$111,289.00
Total Paid in capital	$111,831.00
Retained Earnings	$32,300.00
Treasury Stock	-$5,200.00
Total Stockholder's Equity	$138,931.00