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 46,000 additional shares of $1 par value common stock for $43 per share. May 10 Purchases 4,100 shares of treasury stock for $46 per share. June 1 Declares a cash dividend of $1.05 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 2,050 shares of treasury stock purchased on May 10 for $51 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, $3,600,000; and Retained Earnings, $1,100,000. Net income for the year ended December 31, 2021, is $510,000. 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.) X Answer is not complete. POWER DRIVE CORPORATION Balance Sheet (Stockholders' Equity Section) December 31, 2021 Stockholders' Equity: Common Stock $ 1,978,000 X Additional Paid-in Capital 100,000 2,078,000 Total Paid-in Capital Retained Earnings Treasury Stock Total Stockholders' Equity $ 2,078,000

Answer 1

Balance Sheet
Stockholders' Equity Section
December 31,2021
Stockholders' Equity:
Common Stock	146000
Additional Paid­ in Capital	5542250
Total Paid ­in Capital	5688250
Retained Earnings	1461005
Treasury Stock	-94300
Total Stockholders' Equity	7054955
Workings:
Statement of Stockholders' Equity
For the Year Ended December 31, 2021
	Common Stock	Additional Paid­in Capital	Retained Earnings	Treasury Stock	Total Stockholders' Equity
Balance, January 1	100000	3600000	1100000		4800000
Issued common stock	46000	1932000			1978000
Purchase treasury stock				-188600	-188600
Cash dividends			-148995		-148995
Sale of treasury stock		10250		94300	104550
Net income			510000		510000
Balance, December 31	146000	5542250	1461005	-94300	7054955
Cash dividends	148995	=(100000+46000-4100)*1.05