Question

The following is a summary of all relevant transactions of Larkspur Corporation since it was organized in 2020.

In 2020, 13,600 shares were authorized and 6,500 shares of common stock ($50 par value) were issued at a price of $56. In 2021, 1,100 shares were issued as a stock dividend when the stock was selling for $59. 330 shares of common stock were bought in 2022 at a cost of $63 per share. These 330 shares are still in the company treasury.

In 2021, 9,600 preferred shares were authorized and the company issued 5,000 of them ($100 par value) at $110. Some of the preferred stock was reacquired by the company and later reissued for $4,720 more than it cost the company.

The corporation has earned a total of $636,300 in net income after income taxes and paid out a total of $304,300 in cash dividends since incorporation.

Prepare the stockholders’ equity section of the balance sheet in proper form for Larkspur Corporation as of December 31, 2022. Account for treasury stock using the cost method.

Answer 1

ANSWER

Larkspur Corporation

December 31, 2022.

	Amount ($)	Amount ($)
Capital stock:
Preferred stock, $100 par value, 9,600 shares authorized, 5,000 shares issued and outstanding		500,000
Common stock, $50 par value, 13,600 shares authorized, 7,600 shares issued, 7,270 shares outstanding		380,000
Total capital stock		880,000
Additional paid-in capital:
In excess of par - preferred (5,000 shares * $10 above par)	50,000
In excess of par - common stock [(6,500*$6)+(1,100*$9)]	48,900
From treasury stock - preferred	4,720	103,620
Total paid-in capital		983,620
Retained earnings (636,300 -304,300 -64,900)		267,100
Total paid-in capital and retained earnings		1,250,720
Cost of treasury stock (330 shares - common * $63)		20,790
Total stockholders’ equity		1,229,930

================

DEAR STUDENT,

IF YOU HAVE ANY QUERY PLEASE ASK ME IN THE COMMENT BOX,I AM HERE TO HELP YOU.PLEASE GIVE ME POSITIVE RATING..

****************THANK YOU****************