Question

CALCULATOR PR Exercise 15-18 (Part Level Submission) Blue Company reported the following amounts in the stockholders' equity section of its December 31, 2016, balance sheet. Preferred stock, 10%, $100 par (10,000 shares authorized, 1,900 shares issued) Common stock, s5 par (101,000 shares authorized, 20,200 shares issued) $190,000 101,000 125,000 431,000 $847,000 Additional paid-in capital Retained earnings Total During 2017, Blue took part in the following transactions concerning st per share dividend on preferred stock and a s2 per share dividend on common Rock. These dividends had been declared on December 31, 20 common stock for $43 per share. Blue uses the cost method. 2. Purchased 1,800 shares of its own outstanding 3. Reissued 700 treasury shares for land valued at $31,600. 4. Issued 530 shares of preferred stock at $104 per share. 5. Declared a 10% stock dividend on the outstanding common stock when the stock is seling for 6. Issued the stock dividend 2017 $10 per share dividend on preferred stock and the s2 per share dividend on common stock. These dividends are payable in 2018.

Answer 1

BLUE COMPANY

Stockholder's equity

December 31, 2017

Capital stock: Preferred stock $243000 Common stock $110550 Total capital stock $353550 Additional paid in capital $208840 Total paid in capital $562390 Retained earning $588910 Total paid in capital and retained earning $1151300 Less: Treasury stock $47300

Stockholder's equity = $1104000

Additional paid in capital:

$125000 + paid in capital in excess of par ( treasury stock) + paid in capital in excess of par (issued preferred stock) + paid in capital in excess of par ( from point 5)

= $125000 + [$31600-(700×$43)] + [(530×$104)-(530×$100)] + [(20200-1800+700)(shares outstanding) × 10% × ($47-$5)]

= $125000 + $1500 + $2120 + $80220

= $208840

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