Question

Sandhill Company has two classes of capital stock outstanding: 7%, $100 par preferred and $2 par common. At December 31, 2017, the following accounts were included in stockholders' equity. Preferred Stock, 40,000 shares Common stock. 800.000 shares Paid-in Capital in Excess of Par - Preferred Stock Paid-in Capital in Excess of Par - Common Stock Retained Earnings $4,000,000 1,600,000 240,000 19,200,000 12,900,000 The following transactions affected stockholders' equity during 2018. Jan. 1 - 500 shares of preferred stock issued at $108 per share. Mar. 21 - 104,000 shares of common stock issued at $41 per share. June 1 - 2-for-1 common stock split (par value reduced to $1). July 15 - 80,000 shares of common treasury stock purchased at $28 per share. Sandhill uses the cost method. Sept. 4 - 10,000 shares of treasury stock reissued at $34 per share. Dec. 31 - The preferred dividend is declared, and a common dividend of 77¢ per share is declared. Dec. 31 - Net income is $4,519,000. Prepare the stockholders' equity section for Hatch Company at December 31, 2018.

Answer 1

Answer:

Before preparing the stockholders equity section of Sandhill Company, firstly we should know about what is stockholders equity section.

Stockholders Equity Section of Balance Sheet which is also known as Shareholders Equity is the account on a company's balance sheet that consists of share capital plus retained earnings.It includes the following accounts:

• Preferred stock
• Additional Paid-In capital-Preferred stock
• Common stock
• Additional Paid-In capital-Common stock
• Retained earnings(or Accumulated Loss); and,
• Treasury Stock

Stockholders Equity
Paid-In Capital
Capital Stocks:
7%Preferred Stock,$100 par value,40000 shares authorized,500 shares issued		$50000
Common Stock,$2 par value,800000 shares authorized, 104000 shares issued		208000
Total Capital Stock		258000
Additional Paid-In Capital
Paid-In capital in Excess-Preferred Stock	$244000
Paid-In capital in Excess-Common Stock	23464000
Dividend payable	8011500
Total Additional Paid-In Capital		31719500
Total Paid-In Capital		31977500
Retained earnings		17419000
Total Paid-In capital and Retained earnings		49396500
Less: Treasury Stock	1900000
Total Shareholders Equity		47496500