Question

Go online for multiple-choice questions with solutions, review exercises with solutions, and an glossary of all key terms sa Jaymes sh o f outstanding common stock and had a PRACTICE PROBLEM D'Ouville Company was formed on July 1, 2014. It was authorized to issue 500,000 shares of $10 par value com 100.000 shares of 4% $25 par value, cumulative and nonparticipating preferred stock. D'Ouville Company has common och fiscal year. The following information relates to the stockholders' equity accounts of D'Ouville Company Common Stock Prior to the 2016-2017 fiscal year, D'Ouville Company had 110,000 shares of outstandine com as follows: 1. 95.000 shares were issued for cash on July 1, 2014 at 531 per share. 2. On July 24, 2014.5.000 shares were exchanged for a plot of land which cost the seller $70,000 in 2008 and had fair value of $220,000 on July 24, 2014 3. 10,000 shares were issued on March 1, 2016, for $42 per share During the 2016-2017 fiscal year, the following transactions regarding common stock took place. November 30, 2016 D'Ouville purchased 2,000 shares of its own stock on the open market at $39 per share. De the cost method for treasury stock. December 15, 2016 D'Ouville declared a 5% stock dividend for stockholders of record on January 15, 2017, to be ary 31, 2017, D'Ouville was having a liquidity problem and could not afford a cash dividend D'Ouville's common stock was selling at 552 per share on December 15, 2016, ed at the June 20, 2017 D'Ouville sold 500 shares of its own common stock that it had purchased on November $21,000 Preferred Stock: D'Ouville issued 100,000 shares of preferred stock at $44 per share on July 1, 2015 Cash Dividends: D'Ouville has followed a schedule of declaring cash dividends in December and June, with payment made to stockholders of record in the following month. The cash dividends which have been declared since inception company through June 30, 2017, are shown below. Common Stock Declaration Date 12/15/15 6/15/16 12/15/16 $0.30 per share $0.30 per share Preferred Stock $0.50 per share $0.50 per share $0.50 per share No cash dividends were declared during June 2017 due to the company's liquidity problems. ained Earnings: As of June 30, 2016, D'Ouville retained earnings account had a balance of $550,00 year ending June 30, 2017, D'Ouville reported net income of $120,000. Instructions Prepare the stockholders' equity section of the balance sheet, including appropriate notes, for D'Ouville Company 30, 2017, as it should appear in its annual report to the shareholders.

Answer 1

D’Ouville Company
Stockholders’ Equity
June 30, 2014
Capital stock
preferred stock (100000*25)	2500000
Common stock ((95000+5000+10000)+(5%*(95000+5000+10000-2000))*10)	1154000
Total capital stock		3654000
Additional paid-in capital
In excess of par-preferred (100000*(44-25))	1900000
In excess of par-common (95000*(31-10))+(220000-(5000*10))+(10000*(42-10))+ (((95000+5000+10000-2000)*5%)*(47-10))	2684800
Less: From treasury stock (500*(39-(21000/500)))	1500	4586300
Total paid-in capital		8240300
Retained earnings (550000+120000-((95000+5000+10000-2000)*5%*52)-50000)		339200
Total paid-in capital and retained earnings		8579500
Less: Treasury stock (2000-500)*39		58500
Total stockholders’ equity		$8521000

Note: D’Ouville Company is authorized to issue 500,000 shares of $10 par value common and 100,000 shares of $25 per value, cumulative and nonparticipating preferred.