Question

A company designs and produces a line of golf equipment and golf apparel. The company has 100,000 shares of common stock outstanding as of the beginning of Year 1. The company has the following transactions affecting stockholders' equity in Year 1 March 1 Issues 47,000 additional shares of $1 par value common stock for $44 per share. May 10 Purchases 4,200 shares of treasury stock for $47 per share. June 1 Declares a cash dividend of $1.10 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 2,100 shares of treasury stock purchased on May 10 for $52 per share. The company has the following beginning balances in its stockholders' equity accounts on January 1 Year 1. Common Stock $100,000 Additional Paid-in Capital, $3,700,000, and Retained Earnings, $1,200,000. Net income for the year ended December 31, Year 1, is $520,000. Required: Prepare the stockholders' equity section of the balance sheet for the company as of December 31, Year 1. (Amounts to be deducted should be indicated by a minus sign.) Balance Sheet (Stockholders' Equity Section) December 31, Year 1 Stockholders' Equity Common Stock $ Additional Paid-in Capital 147,000 7.100.000 Total Paid-in Capital Retained Earnings 7.247,000 1,200,000 Total Stockholders' Equity $ 8,447.000 Prev 1 of 5 Score answer >

Answer 1

Stockholders Equity section - Particulars Total Common Stock 100,000 3,700,000 Retained Earnings 1,200,000 Beginning balances Beginning balance of additional paid in capital Add: Net income for the year 1,300,000 3,700,000 520,000 520,000 47,000 47,000 2,021,000 (197,400) Issued shares (47000*1) Additional paid in capital (47000*43) Repurchases shares (4200*47) Declares dividend (100000+47000-42000)*1.10 Re issues treasury stock (2100*52) Total (115,500) 2,021,000 (197,400) (115,500) 109,200 7,384,300 109,200 5,779,800 1,604,500