Question

Exercise 10-7A Prepare the stockholders' equity section (LO10-7) Finishing Touches has two classes of stock authorized: 8%, $10 par preferred, and $1 par value common. The following transactions affect stockholders' equity during 2021, its first year of operations: January 2 Issues 109,980 shares of common stock for $28 per share. February 6 Issues 2,300 shares of 8% preferred stock for $12 per share. September 19 Purchases 10,800 shares of its own common stock for $33 per share. December 15 Resells 5,800 shares of treasury stock at $38 per share. In its first year of operations, Finishing Touches has net income of $153,000 and pays dividends at the end of the year of $95.000 ($1 per share) on all common shares outstanding and $1.840 on all preferred shares outstanding Required: Prepare the stockholders' equity section of the balance sheet for Finishing Touches as of December 31, 2021. (Amounts to be deducted should be Indicated by a minus slgn.) FINISHING TOUCHES Balance Sheet (Stockholders' Equity Section) December 31, 2021 Stockholders' equity: Common stock ........ 100.000 Additional paid-in capital Total paid-in capital 100.000 Total stockholders' equity S 100.000

Answer 1

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Date Page FIY Islang TOUCHES Stockholder's Equity - Common stock $ 95,000 [asoow shoes @ 1 per share I Preferred stock a - 12.30 shares e lo per preferred shase] $ 23000 Additional paid in capital i Common stock - _272500 12+25562 lococe shares x $27. Soto X $ (38-33) preferred stock 2.30 Shades X2 Total Additional paid in capital $ 27,29600 600 $28,47600 S6160 Add Total paid in Capital Retaired Earnings (is 3.000 - 95000 - 840) Treasury stock. (Soo shaxs x 33) Total Stock holders - 165000 Less Equity 27,38,760

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