Question

Nautical has two classes of stock authorized: $10 par preferred, and $1 par value common. As of the beginning of 2018, 125 shares of preferred stock and 1,100 shares of common stock have been issued. The following transactions affect stockholders’ equity during 2018:

March 1 Issue 1,100 additional shares of common stock for $11 per share.

April 1 Issue 175 additional shares of preferred stock for $21 per share.

June 1 Declare a cash dividend on both common and preferred stock of $0.30 per share to all stockholders of record on June 15.

June 30 Pay the cash dividends declared on June 1.

August 1 Purchase 175 shares of common treasury stock for $8 per share.

October 1 Reissue 125 shares of treasury stock purchased on August 1 for $10 per share.

Nautical has the following beginning balances in its stockholders’ equity accounts on January 1, 2018: Preferred Stock, $1,250; Common Stock, $1,100; Additional Paid-in Capital, $17,600; and Retained Earnings, $9,600. Net income for the year ended December 31, 2018, is $6,700.

Taking into consideration the beginning balances on January 1, 2018 and all the transactions during 2018, respond to the following for Nautical:

Required: 1. Prepare the stockholders' equity section of the balance sheet as of December 31, 2018 NAUTICAL Balance Sheet (Stockholders' Equity Section) December 31, 2018 Stockholders' equity: Preferred stock Common stock Additional paid-in capital Total paid-in capital 0 Retained earnings Treasury stock $ Total stockholders' equity 0 11 value: .85 points Prepare the statement of stockholders' equity for the year ended December 31, 2018. (Amounts to be deducted should be indicated by a minus sign.) NAUTICAL Statement of Stockholders' Equity For the Year Ended December 31, 2018 Additional Paid-in Total Stockholders Equity Preferred Common Retained Earnings Treasury Stock Stock Stock Capital Balance, January 1 Issue common stock Issue preferred stock Dividends Purchase treasury stock Reissue treasury stock Net income 0 $ 0 C S 0 S Balance, December 31

Answer 1

	preferred stock	common stock	additional paid in capital	retained earning	treasury stock	total stockholders equity
Balance jan 1	1250	1100	17600	9600	0	29550
Mar 1 Issue common stock at 11 per share		1100	11000			12100
April 1 Issued 175 preferred stock at 21 per share	1750		1925			3675
June 1 Cash dividend of .3 on 300 preferred stock and 2200 common stock				-750		-750
aug 1 purchased common stock as treasury stock					-1400	-1400
oct 1 reissue 125 treasury stock at 10 per share			250		1000	1250
balance dec 31	3000	2200	30775	8850	-400	44425
Balance sheet
Shareholders equity
preferred stock		3000
common stock		2200
additional paid in capital		30775
total paid in capital		35975
retained earning		8850
treasury stock		-400
total stockholders equity		44425