Question

Pina Company has two classes of capital stock outstanding: 7%, $20 par preferred and $5 par common. At December 31, 2020, the following accounts were included in stockholders' equity. Preferred Stock, 146,600 shares Common Stock, 1,998,000 shares Paid-in Capital in Excess of Par-Preferred Stock Paid-in Capital in Excess of Par-Common Stock Retained Earnings $ 2,932,000 9,990,000 201,000 26,651,000 4,581,000 The following transactions affected stockholders' equity during 2021. Jan. 1 Feb. 1 June 1 July 1 Sept. 15 Dec. 31 Dec. 31 28,000 shares of preferred stock issued at $23 per share. 49,000 shares of common stock issued at $20 per share. 2-for-1 stock split (par value reduced to $2.50). 3 2,700 shares of common treasury stock purchased at $10 per share. Pina uses the cost method. 10,700 shares of treasury stock reissued at $11 per share. The preferred dividend is declared, and a common dividend of 48¢ per share is declared. Net income is $2,099,000. Prepare the stockholders' equity section for Pina Company at December 31, 2021. (Enter account name only and do not provide descriptive information.)

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Answer 1

$ $ $ 3,492,000 10,235,000 13,727,000 PINA COMPANY Stockholder's Equity December 31, 2021. Capital Stock Preferred Stock Common Stock Total Capital Stock Additional Paid in Capital Paid in Capital in excess of Par-Preferred Stock $ Paid in Capital in excess of Par - Common Stock $ Paid in Capital - Trasury Stock $ Total Paid in Capital Reatined Earnings Total Paid in Capital and Retained earnings Less: Treasury Stock Total Stockholder's Equity 285,000 27,386,000 10,700 $ $ $ $ $ $ 27,681,700 41,408,700 4,481,000 45,889,700 (220,000) 45,669,700

Woking Notes Preferred Stock - capital stock and additional paid in capital Beginning balance Add : Issue on Jan 1 Addition paid in Capital Stock capital $ 2,932,000 201,000 560,000 $ 84,000 ( 28000*$20) (28000*($23-20)) $ 3,492,000 $ 285,000 Ending Balance Common Stock - capital stock and additional paid in capital Addition paid in Capital Stock capital Beginning balance $ 9,990,000 $ 26,651,000 Add : Issue on Feb 1 $ 245,000 $ 735,000 (49000*$5) (49000*($20-5)) Ending Balance $ 10,235,000 $ 27,386,000 Treasury Stock paid in capital Reissue of treasury stock (10700 * $ 11 ) Less: Cost of treasury Stock ( 10700 * $ 10) Treasury Stock paid in capital 117,700 (107,000)| 10,700 $ Trasury stock at cost which was not issued Treasury Stock = ( 32700 - 10700 ) * $ 10 = $ 220,000

Retained Earnings : Beginning balance Add: Net Income Less : dividend Ending balance $ $ $ $ 4,581,000 2,099,000 (2,199,000) 4,481,000 Dividend : Preference dividend = $ 3492000 * 7% = Common dividend = 4072000*$ 0.48 = Total Dividend $ $ $ 244,440 1,954,560 2,199,000 No. of common shares on which divided given Initial shares Fresh issue on Feb 1 Total Common Shares Shares afterStock Split ( 2047000*2)|| Less: Treasury stock purchased 1998000 49000 2047000 4094000 -32700 Add : Treasury stock re issued 10700 No. of common shares for dividend 4072000