Question

"Stockholders' Equity" section of balance sheet Specialty Auto Racing Inc. retails racing products for BMWs, Porsches, and Ferraris. The following accounts and their balances appear in the ledger of Specialty Auto Racing on July 31, the end of the current year: Common Stock, $10 par $320,000 Paid-In Capital from Sale of Treasury Stock-Common 24,100 Paid-In Capital in Excess of Par-Common Stock 96,000 Paid-In Capital in Excess of Par-Preferred Stock 81,900 Preferred 4% Stock, $50 par 1,365,000 Retained Earnings 2,302,100 Treasury Stock-Common 50,600 Fifty thousand shares of preferred and 200,000 shares of common stock are authorized. There are 4,600 shares of common stock held as treasury stock. Prepare the Stockholders' Equity section of the balance sheet as of July 31, the end of the current year using Method 1 of Exhibit 9.

Answer 1

Specialty Auto Racing Inc.
Stockholders' Equity
July 31, 20XX
Paid-In Capital:
Preferred 4% Stock, $50 Par (50,000 Shares Authorized, 27,300 Shares Issued)	1365000
Excess of Issue Price Over Par	81900
Paid-in capital, preferred stock		1446900
Common Stock, $10 Par (200,000 Shares Authorized, 32,000 Shares Issued)	320000
Excess of Issue Price Over Par	96000
Paid-in capital, common stock		416000
From Sale of Treasury Stock		24100
Total Paid-In Capital			1887000
Retained Earnings			2302100
Total			4189100
Treasury Stock (4,600 Shares at Cost)			50600
Total Stockholders' Equity			4138500
Note: Treasury Stock can alternatively be written with a minus sign.