Question

Required information (The following information applies to the questions displayed below.) National League Gear has two classes of stock authorized: 4%, $20 par preferred, and $5 par value common. The following transactions affect stockholders' equity during 2021, National League's first year of operations: February 2 Issue 1.2 million shares of common stock for $32 per share. February 4 Issue 570,000 shares of preferred stock for $23 per share. June 15 Purchase 120,000 shares of its own common stock for $27 per share. August 15 Resell 90,000 shares of treasury stock for $42 per share. November 1 Declare a cash dividend on its common stock of $1.20 per share and a $ 456,000 (4% of par value) cash dividend on its preferred stock payable to all stockholders of record on November 15. (Hint: Dividends are not paid on treasury stock.) November 30 Pay the dividends declared on November 1. 2. Prepare the stockholders' equity section of the balance sheet as of December 31, 2021. Net income for the year was $4,870,000. (Amounts to be deducted should be indicated by a minus sign.) NATIONAL LEAGUE GEAR Balance Sheet (Stockholders' Equity Section) December 31, 2021 Stockholders' equity: Common stock Preferred stock Additional paid-in capital Total paid-in capital Retained earnings Treasury stock ...... Total stockholders' equity

Answer 1

National league Gear Balenie sheet stock holder's equity sections. $6000000 $ 11400 000 stockholder's Oquity. commm Stock [1200000 x 5) Preferred stock (570000 x 20) Additional paid in capitel Paid in capital in excurs of par value - Common stock - Preferred stock. -Treasury stock [ 90000* [u2-27) $32400000 $1710000 $1350000 $2030000 Treasy stock paid in Capital Total paid in capital $55290000 Retained Earnings (18870000 - [[1200000 –30000) x 1.2) $3010000 - 456000] 58 300 000 Treasure stod C 30000 X2+) (810 000) Total Stout holder's equity $57490000