Question

help with finding retained earnings and treasury stock

Ivanhoe Company has two classes of capital stock outstanding: 8%, $20 par preferred and $5 par common. At December 31, 2020, the following accounts were included in stockholders' equity. Preferred Stock, 152,200 shares Common Stock, 2,039,000 shares Paid-in Capital in Excess of Par-Preferred Stock Paid-in Capital in Excess of Par-Common Stock Retained Earnings $3,044,000 10,195,000 202,000 26,684,000 4,587,000 The following transactions affected stockholders' equity during 2021. Jan. 1 32,600 shares of preferred stock issued at $23 per share. Feb. 1 49,300 shares of common stock issued at $19 per share. June 1 2-for-1 stock split (par value reduced to $2.50). July 1 29.900 shares of common treasury stock purchased at $10 per share. Ivanhoe uses the cost method. Sept. 15 10,300 shares of treasury stock reissued at $12 per share. Dec. 31 The preferred dividend is declared, and a common dividend of 52€ per share is declared. Dec 31 Net income is $2.134,000.

Answer 1

IVANHOE COMPANY Stockholders’ Equity December 31, 2021
Capital stock
Preferred stock		$3696000
Common stock		10441500
Total capital stock		14137500
Additional paid in stock
Paid-in capital in excess of par – preferred stock	299800
Paid in capital in excess of par – common stock	27374200
Paid in capital from treasury stock	20600
		27694600
Total paid in capital		41832100
Retained earnings		4263680
Total paid in capital and retained earnings		46095780
Less: Treasury stock		196000
Total stockholder’s equity		$45899780

Preferred stock = 3044000+(32600*20) = 3696000

Common stock= 10195000+(49300*5) = 10441500

Paid-in capital in excess of par – preferred stock = 202000+(32600*3) = 299800

Paid in capital in excess of par – common stock = 26684000+(49300*14) =27374200

Paid in capital from treasury stock = 10300*2 = 20600

Retained earnings =4587000+2134000-((152200+32600)*20*8%)-((((2039000+49300)*2)-(29900-10300))*0.52) = 4200275

Treasury stock = (29900-10300)*10 = 196000