Question

Check my In Draco Corporation's first year of business, the following transactions affected its equity accounts. • Issued 7600 shares of $2 par value common stock for $54. It authorized 20,000 shares. • Issued 1,900 shares of 12%, $10 par value preferred stock for $59. It authorized 3,000 shares. Reacquired 380 shares of common stock for $66 each. • Retained earnings is impacted by reported net income of $86,000 and cash dividends of $33,000 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 Common stock-$2 par value Paid-in capital in excess of par value, common stock Preferred stock-$10 par value Pald-in capital in excess of par value, preferred stock Retained earnings Less: Cost of treasury stock Total stockholders' equity

Answer 1

Workings: DRACO CORPORATION Stockholders' equity section of the balance sheet Decemebr 31 Common Stock-$2 Par value 15,200 Paid in Capital in Excess of Par value, Common Stock 395,200 Preferred Stock-$10 Par value 19,000 Paid in Capital in Excess of Par value, Preferred Stock 93,100 Retained Earnings 53,000 Less: Cost of Treasury stock (25,080) Total Stockholder's equity 550,420 (7,600 $2) (7.600 x $52) (1,900 $10) (1.900 $49) ($86,000 -33,000) (380 $66)