Question

Check my work Exercise 11-13 Preparing stockholders' equity section LO P1, C2, P3, C3 In Draco Corporation's first year of business, the following transactions affected its equity accounts. • Issued 4,400 shares of $2 par value common stock for $22. It authorized 20,000 shares. Issued 1,100 shares of 12%, $10 par value preferred stock for $27. It authorizedt3,000 shares. . Reacquired 220 shares of common stock for $34 each. Retained earnings is impacted by reported net income of $54,000 and cash dividends of $17,000. Prepare the stockholders' equity section of Draco's balance sheet as of December 31. (Amounts to be deducted should be indicated by a minus sign.) DRACO CORPORATION Stockholders' Equity Section of the Balance Sheet December 31 Total stockholders' equity

Answer 1

DRACO CORPORATION
Stockholders Equity Section of the Balance Sheet
December 31
Common stock, authorized 20,000 shares, issued 4,400 shares of $2 par	8,800
Paid in capital, in excess of par - common	88,000
Preferred stock, authorized 3,000 shares, issued 1,100 shares of $10 par	11,000
Paid in capital, in excess of par, preferred	18,700
Retained earnings	37,000
Treasury stock	-7,480
Total Stockholders Equity	$156,020

Retained earnings = Net income - Cash dividends

= 54,000-17,000

= $37,000

Treasury stock = Number of shares reacquired x Price per share

= 220 x 34

= $7,480

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