National League Gear has two classes of stock authorized: 4%, $20 par preferred, and $5 par value common. The following transactions affect stockholders’ equity during 2021, National League’s first year of operations:
February | 2 | Issue 1.4 million shares of common stock for $16 per share. | |
February | 4 | Issue 410,000 shares of preferred stock for $23 per share. | |
June | 15 | Purchase 140,000 shares of its own common stock for $11 per share. | |
August | 15 | Resell 105,000 shares of treasury stock for $26 per share. | |
November | 1 | Declare a cash dividend on its common stock of $1.40 per share and a $328,000 (4% of par value) cash dividend on its preferred stock payable to all stockholders of record on November 15. (Hint: Dividends are not paid on treasury stock.) | |
November | 30 | Pay the dividends declared on November 1. |
2. Prepare the stockholders’ equity section of the balance sheet as of December 31, 2021. Net income for the year was $4,710,000. (Amounts to be deducted should be indicated by a minus sign.)
Requirement 2:
NATIONAL LEAGUE GEAR | |
Balance Sheet | |
(Stockholders' Equity section) | |
December 31,2021 | |
Stockholders' equity: | |
Common stock | $7,000,000 |
Preferred stock | $8,200,000 |
Paid-in capital in excess of par-common | $15,400,000 |
Paid-in capital in excess of par-preferred | $1,230,000 |
Paid-in capital in excess from treasury stock | $1,575,000 |
Total paid-capital | $33,405,000 |
Retained earnings | $2,471,000 |
Total paid-in capital and retained earnings | $35,876,000 |
(Less): Treasury stock | ($385,000) |
Stockholders' equity | $35,491,000 |
Calculations:
Common stock | Preferred stock |
Paid-in capital in excess of par- Common stock |
Paid-in capital in excess of par- Preferred stock |
Paid-in capital in excess of par from Treasury stock |
Retained Earnings |
Treasury stock | |
Feb 2 | $7,000,000 | $15,400,000 | |||||
Feb 4 | $8,200,000 | $1,230,000 | |||||
Jun 15 | $1,540,000 | ||||||
Aug 15 | $1,575,000 | ($1,155,000) | |||||
Nov 1 | $4,710,000 | ||||||
Nov 30 | ($2,239,000) | ||||||
Total | $7,000,000 | $8,200,000 | $15,400,000 | $1,230,000 | $1,575,000 | $2,471,000 | $385,000 |
Dividends:
Outstanding common shares | |
New issue | 1,400,000 |
Treasury stock | -140,000 |
Sale of treasury stock | 105,000 |
Total | 1,365,000 |
Common stock dividend [1,365,000 x $1.40] | $1,911,000 |
Preferred stock dividend | $328,000 |
Total dividends | $2,239,000 |
National League Gear has two classes of stock authorized: 4%, $20 par preferred, and $5 par...
National League Gear has two classes of stock authorized: 4%, $20 par preferred, and $5 par value common. The following transactions affect stockholders’ equity during 2021, National League’s first year of operations: February 2 Issue 1.4 million shares of common stock for $16 per share. February 4 Issue 410,000 shares of preferred stock for $23 per share. June 15 Purchase 140,000 shares of its own common stock for $11 per share. August 15 Resell 105,000 shares of treasury stock for...
National League Gear has two classes of stock authorized: 4%, $20 par preferred, and $5 par value common. The following transactions affect stockholders' equity during 2021, National League's first year of operations: February 2 Issue 1.4 million shares of common stock for $16 per share. February 4 Issue 410,000 shares of preferred stock for $23 per share. June 15 Purchase 140,000 shares of its own common stock for $11 per share. August 15 Resell 105,800 shares of treasury stock for...
National League Gear has two classes of stock authorized: 5%, $20 par preferred, and $5 par value common. The following transactions affect stockholders’ equity during 2021, National League’s first year of operations: Required information [The following information applies to the questions displayed below.) National League Gear has two classes of stock authorized: 5%, $20 par preferred, and $5 par value common. The following transactions affect stockholders' equity during 2021, National League's first year of operations: February 2 Issue 1.5 million...
National League Gear has two classes of stock authorized: 5%, $20 par preferred, and $5 par value common. The following transactions affect stockholders’ equity during 2021, National League’s first year of operations: February 2 Issue 1.5 million shares of common stock for $30 per share. February 4 Issue 550,000 shares of preferred stock for $24 per share. June 15 Purchase 150,000 shares of its own common stock for $25 per share. August 15 Resell 112,500 shares of treasury stock for...
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Required information (The following information applies to the questions displayed below.) National League Gear has two classes of stock authorized: 4%, $20 par preferred, and $5 par value common. The following transactions affect stockholders' equity during 2021, National League's first year of operations: February 2 Issue 1.2 million shares of common stock for $32 per share. February 4 Issue 570,000 shares of preferred stock for $23 per share. June 15 Purchase 120,000 shares of its own common stock for $27...
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Major League Apparel has two classes of stock authorized: 6%, $10 par preferred, and $1 par value common. The following transactions affect stockholders' equity during 2021, its first year of operations: January 2 Issue 110,000 shares of common stock for $70 per share. February 14 Issue 60,000 shares of preferred stock for $12 per share. May 8 Purchase 11,000 shares of its own common stock for $60 per share. May 31 Resell 5,500 shares of treasury stock for $65 per...
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Major League Apparel has two classes of stock authorized: 6%, $10 par preferred, and $1 par value common. The following transactions affect stockholders’ equity during 2021, its first year of operations: January 2 Issue 110,000 shares of common stock for $70 per share. February 14 Issue 60,000 shares of preferred stock for $12 per share. May 8 Purchase 11,000 shares of its own common stock for $60 per share. May 31 Resell 5,500 shares of treasury stock for $65 per...