Question

Common stock, par $1, authorized 100,000 shares Capital in excess of par value ($2 per share) Retained earnings 60,000 140,000 During 2010, the following transactions occurred affecting stockholders' equity (in the order given): C. D. Issued a 100% stock dividend when the market price was at $5 per share. Purchased treasury stock, 1,000 shares at a total cost of $8,000. Declared and paid cash dividends, $15,000. Net income for 2010, $25,000. Required: The stockholders' equity section of the balance sheet for the company must be prepared for the December 31, 2010 balance sheet. It is given below with certain amounts missing. Supply the missing amounts by entering them in the blanks. STOCKHOLDERS' EQUITY (1) (2) $ Common stock, par $1 authorized shares 100,000 shares issued Capital in excess of par value Total contributed capital Retained earnings Treasury stock, shares Total stockholders' equity (3) (4) (5) (7) (8) $ $ $

2. On January 1, 2010, the accounts of Mac Corporation showed the following:

Answer 1

Common stock, par $1, authorized shares 100,000, shares issued 60000	$            60,000
Capital in excess of par value	$            60,000
Total contributed capital	$         1,20,000
Retained earnings [140000-30000-15000+25000]	$     1,20,000
	$      2,40,000
Less: Treasury stock, 1000 shares	$              8,000
Total stockholders' equity	$     2,32,000
Note:
As the stock dividend is a large stock dividend [% being more
than 25%], only the par value of the shares need be transferred
from retained earnings to common stock.