Question

Specialty Auto Racing Inc. retails racing products for BMWs, Porsches, and Ferraris. The following accounts and their balances appear in the ledger of Specialty Auto Racing on July 31, the end of the current year: 1 Common Stock, $37 par $9,805,000.00 2 Paid-In Capital from Sale of Treasury Stock-Common 327,000.00 3 Paid-In Capital in Excess of Par-Common Stock 2,650,000.00 4 Paid-In Capital in Excess of Par-Preferred Stock 332,500.00 5 Preferred 1% Stock, $150 par 7,125,000.00 6 Retained Earnings 68,366,200.00 7 Treasury Stock-Common 994,400.00 Fifty thousand shares of preferred and 300,000 shares of common stock are authorized. There are 22,600 shares of common stock held as treasury stock. Prepare the Stockholders’ Equity section of the balance sheet as of July 31, the end of the current year, using Method 1 of Exhibit 9. Refer to the lists of Accounts and Amount Descriptions provided for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Answer 1

Specialty Auto Racing Inc

Stockholders’ Equity Section of the Balance Sheet as of July 31:

Specialty Auto Racing Inc
Stockholders' Equity Section of the Balance Sheet as on July 31
Paid-in Capital
Preferred 1% Stock, $150 par value
(50,000 shares authorized, 47,500 shares issued)	$7,125,000
Excess of issue price over par	$332,500	$7,457,500
Common Stock, at $37 par value
(300,000 shares authorized, 265,000 shares issued)	$9,805,000
Excess of issue price over par	$2,650,000	$12,455,000
From sale of treasury stock		$327,000
Total Paid-in Capital		$13,529,500
Retained Earnings		$68,366,200
Total		$81,895,700
Less: Treasury Common Stock
(22,600 shares at cost)		$994,400
Total Stockholders' Equity			$80,901,300