Question

Tony and Suzie have purchased land for a new camp. Now they need money to build the cabins, dining facility, a ropes course, and an outdoor swimming pool. Tony and Suzie first checked with Summit Bank to see if they could borrow an additional $1 million, but unfortunately the bank turned them down as too risky. Undeterred, they promoted their idea to close friends they had made through the outdoor clinics and TEAM events. They decided to go ahead and sell shares of stock in the company to raise the additional funds for the camp.

Great Adventures has authorized $1 par value common stock. When the company began on July 1, 2021, Tony and Suzie each purchased 10,000 shares (20,000 shares total) of $1 par value common stock at $1 per share. The following transactions affect stockholders’ equity during the remainder of 2022:

November	5		Issue an additional 100,000 shares of common stock for $10 per share.
November	16		Purchase 10,000 shares of its own common stock (i.e., treasury stock) for $15 per share.
November	24		Resell 4,000 shares of treasury stock at $16 per share.
December	1		Declare a cash dividend on its common stock of $11,400 ($0.10 per share) to all stockholders of record on December 15.
December	20		Pay the cash dividend declared on December 1.
December	31		Pay $800,000 for construction of new cabins and other facilities. The entire expenditure is recorded in the Buildings account.

2. Great Adventures has net income of $35,835 in 2022. Retained earnings at the beginning of 2022 was $33,450. Prepare the stockholders’ equity section of the balance sheet for Great Adventures as of December 31, 2022. (

Answer 1

Statement showing Stockholder Equity
Common Stock	$110,000
Paid-in capital in excess of par value - Common	$900,000
Paid-in capital in excess of par value - Treasury Stock	$4,000
Total Paid in Capital	$1,014,000
Retained earnings	$57,885
Less: Treasury Share	-$90,000
Total Stock Holder Equity as on 31 Dec 2022	$981,885

Statement of Equity Shareholder Equity-Worksheet
Date	Common Stock	+	Paid In capital in Excess of Par - Common	+	Paid in Capital in Excess of Par- Treasury Stock	+	Retained Earning	-	Treasury Stock
Beg	$10,000						$33,450
5-Nov	$100,000		$900,000
16-Nov									$150,000
24-Nov					$4,000				-$60,000
1-Dec							-$11,400
31-Dec							$35,835
Total	$110,000		$900,000		$4,000		$57,885		$90,000

Answer 2

Prepare stockholders' equity section as on December 31, 2022 in the manner given below: 1 | Company GA Balance Sheet (Partial) 5 December 31, 2022 6 Stockholders' equity 7 Common stock 8 Additional paid-in capital 9 Total paid in capital 10 Retained earnings (Closing) 11 Treasury stock 12 Total stockholders' equity 13 Amount $110,000 $904,000 $1,014,000 $57,885 $60,000 $1,011,885 14

Prepare spreadsheet showing calculations of stockholders' equity 1 section as on December 31, 2022 in the manner given below: Company GA Balance Sheet (Partial) December 31, 2022 6 Stockholders' equity Amount 7 Common stock =(10000*1)+(100000*1) 8 Additional paid-in capital =(100000*(10-1))+(4000*(16-15)). 9 Total paid in capital =SUM(B7:38) 10 Retained earnings (Closing) | =(33450-11400+35835) 11 Treasury stock =4000*15 12 Total stockholders' equity I=B9+B10-B11

Answer 3