Question

Current Attempt in Progress Blue Company has two classes of capital stock outstanding: 8%, $20 par preferred and $5 par common. At December 31, 2020, the following accounts were included in stockholders' equity. Preferred Stock, 149,400 shares Common Stock, 2,019,000 shares Paid-in Capital in Excess of Par-Preferred Stock Paid-in Capital in Excess of Par-Common Stock Retained Earnings $ 2,988,000 10,095,000 206,000 26,815,000 4,485,000 The following transactions affected stockholders'equity during 2021. Jan. 1 31,100 shares of preferred stock issued at $24 per share. Feb. 1 50,500 shares of common stock issued at $21 per share. June 1 2-for-1 stock split (par value reduced to $2.50). July 1 32,900 shares of common treasury stock purchased at $11 per share. Blue uses the cost method. Sept. 159,000 shares of treasury stock reissued at $12 per share. Dec 31 The preferred dividend is declared, and a common dividend of 52¢ per share is declared. Dec 31 Net income is $2,078,000. Prepare the stockholders' equity section for Blue Company at December 31, 2021. (Enter account name only and do not provide descriptive information.)

Answer 1

Answer:

BLUE COMPANY
Stockholders' Equity
For the Year Ended December 31,2021
Capital Stock:
Preferred stock		$3,610,000
Common stock		$10,347,500
Total capital stock		$13,957,500
Additional capital:
Paid-in capital in excess of par-Preferred	$330,400
Paid-in capital in excess of par-Common	$27,623,000
Paid-in capital in excess from Treasury	$9,000	$27,962,400
Total paid-in capital		$41,919,900
Retained earnings		$4,134,348
Total paid-in capital and Retained earnings		$46,054,248
(Less): Treasury stock		($262,900)
Total Stockholders' Equity		$45,791,348

Calculations:

	Preferred stock	Common stock	Paid-in capital in excess of par - preferred stock	Paid-in capital in excess of par - common stock	Paid-in capital in excess from treasury stock	Retained Earnings	Treasury stock
Beg. Bal.	$2,988,000	$10,095,000	$206,000	$26,815,000		$4,485,000
Jan.1 Issuance of preferred stock	$622,000		$124,400
Feb.1 Issuance of common stock		$252,500		$808,000
June 1 Stock-split
July 1 Purchase of own shares							$361,900
Sept.15 Sale of treasury stock					$9,000		($99,000)
Dec.31 Dividends*						($2,428,652)
Dec.31 Net income						$2,078,000
Total	$3,610,000	$10,347,500	$330,400	$27,623,000	$9,000	$4,134,348	$262,900

*Dividends:

Outstanding common shares		Outstanding preferred shares
Beginning	2019000	Beginning	149400
New issue	50500	New issue	31100
Balance before stock-split	2069500	Balance	180500
Stock-split	2:1
Balance after stock-split	4139000
Treasury stock	-32900
Sale of treasury stock	9000
Balance	4115100
Common dividend (4,115,100 x $0.52)	$2,139,852	Preferred dividend (180,500 x $20 x 8%)	$288,800
Total dividend = 2,139,852+$288,800 = $2,428,652