Question

Finishing Touches has two classes of stock authorized: 7%, $10 par preferred, and $1 par value common. The following transactions affect stockholders' equity during 2021, its first year of operations: January 2 Issues 100,000 shares of common stock for $21 per share. February 6 Issues 1,600 shares of 7% preferred stock for $13 per share. September 10 Purchases 12,000 shares of its own common stock for $26 per share. December 15 Resells 6,000 shares of treasury stock at $31 per share. In its first year of operations, Finishing Touches has net income of $146,000 and pays dividends at the end of the year of $94,000 ($1 per share) on all common shares outstanding and $1,120 on all preferred shares outstanding. Required: Prepare the stockholders' equity section of the balance sheet for Finishing Touches as of December 31, 2021. (Amounts to be deducted should be indicated by a minus sign.) FINISHING TOUCHES Balance Sheet (Stockholders' Equity Section) December 31, 2021 Stockholders' equity: Total paid-in capital | Total stockholders' equity $

Answer 1

Stockholder's equity
Common Stock	100000
paid in capital in excess of par value-Common stock	2000000
Preferred stock	16000
paid in capital in excess of par value-Preferred stock	4800
Paid in capital from sale of treasury stock	30000
Total paid in capital	2150800
Retained earnings	52000
Total	2202800
Treasury Stock	-156000
Total Stockholder's equity	2046800