Question

Power Drive Corporation designs and produces a line of golf equipment and golf apparel. Power Drive has 100,000 shares of common stock outstanding as of the beginning of 2021. Power Drive has the following transactions affecting stockholders' equity in 2021. March 1 Issues 50,000 additional shares of $1 par value common stock for $47 per share. May 10 Purchases 4,500 shares of treasury stock for $50 per share. June 1 Declares a cash dividend of $1.25 per share to all stockholders of record on June 15. (Hint: Dividends are not paid on treasury stock.) July 1 Pays the cash dividend declared on June 1. October 21 Resells 2,250 shares of treasury stock purchased on May 10 for $55 per share. Power Drive Corporation has the following beginning balances in its stockholders' equity accounts on January 1, 2021: Common Stock $100,000; Additional Paid-in Capital, $4,000,000; and Retained Earnings, $1,500,000. Net income for the year ended December 31, 2021, is $550,000. Required: Prepare the stockholders' equity section of the balance sheet for Power Drive Corporation as of December 31, 2021. (Amounts to be deducted should be indicated by a minus sign.) POWER DRIVE CORPORATION Balance Sheet (Stockholders' Equity Section) December 31, 2021 Stockholders' Equity: Total Paid-in Capital Total Stockholders' Equity

Answer 1

Balance Sheet
Stockholders' Equity Section
December 31,2021
Stockholders' Equity:
Common Stock	150000
Additional Paid­-in Capital	6311250
Total Paid­-in Capital	6461250
Retained Earnings	1868125
Treasury Stock	-112500
Total Stockholders' Equity	8216875
Workings:
Statement of Stockholders' Equity
For the Year Ended December 31, 2021
	Common Stock	Additional Paid­-in Capital	Retained Earnings	Treasury Stock	Total Stockholders' Equity
Balance, January 1	100000	4000000	1500000		5600000
Issued common stock	50000	2300000			2350000
Purchase treasury stock				-225000	-225000
Cash dividends			-181875		-181875
Sale of treasury stock		11250		112500	123750
Net income			550000		550000
Balance, December 31	150000	6311250	1868125	-112500	8216875
Cash dividends	181875	=(100000+50000-4500)*1.25