Question

Help Save & Exit Saved Submit ework Check my work Finishing Touches has two classes of stock authorized: 9%, $10 par preferred, and $1 par value common. The following transactions affect stockholders' equity during 2021, its first year of operations: January 2 Issues 100,000 shares of common stock for $16 per share. February 6 Issues 1,100 shares of 98 preferred stock for $11 per share. September 10 Purchases 11,000 shares of its own common stock for $21 per share. December 15 Resells 5,500 shares of treasury stock at $26 per share. In its first year of operations, Finishing Touches has net income of $141,000 and pays dividends at the end of the year of $94,500 ($1 per share) on all common shares outstanding and $990 on all preferred shares outstanding. Required: Prepare the stockholders' equity section of the balance sheet for Finishing Touches as of December 31, 2021. (Amounts to be deducted should be indicated by a minus sign.) FINISHING TOUCHES Balance Sheet (Stockholders' Equity Section) December 31, 2021 Stockholders' equity: Common stock $ Preferred stock Additional paid-in capital 100,000 11,000 111,000 Total paid-in capital Retained earnings Total stockholders' equity $ 111.000

Answer 1

Finishing Touches				-
Date	Account	Debit	Credit	Calculation
2-Jan	Cash	1,600,000		=100,000*16
	Common Stock		100,000	=100,000*1
	Additional Paid in Capital		1,500,000
6-Feb	Cash	12,100		=1,100*11
	Preferred Stock		11,000	=1,100*10
	Additional Paid in Capital		1,100
10-Sep	Treasury Stock	231,000		=11,000*21
	Cash		231,000
15-Dec	Cash	143,000		=5,500*26
	Treasury Stock		115,500	=5,500*21
	Additional Paid in Capital		27,500
31-Dec	Common Dividends	94,500
	Preferred Dividends	990
	Cash		95,490
31-Dec	Income Summary	141,000
	Retained Earnings		141,000
31-Dec	Retained Earnings	95,490
	Common Dividends		94,500
	Preferred Dividends		990

Finishing Touches T Accounts Date Debit Date Credit Common Stock 2-Jan $ 100,000 Date Date Debit Date Credit Preferred Stock 6-Feb $ 11,000 Debit Date Credit Additional Paid in Capital 2-Jan $ 1,500,000 6-Feb $ 1,100 15-Dec $ 27,500 11,000 Bal. $ 1,528,600 Bal. $ 100,000 Treasury Stock 10-Sep $ 231,000 15-Dec $ 115,500 Bal. $ Retained Earnings 31-Dec $ 95,490 31-Dec $ 141,000 Bal. $ 115,500 Bal. $ 45,510

Finishing Touches
Balance Sheet - Partial
As of Dec 31, 2021
Stockholders Equity
Common Stock	100,000
Preferred Stock	11,000
Additional Paid in Capital	1,528,600
Total Paid in Capital	1,639,600
Retained Earnings	45,510
Total Paid in Capital & Retained Earnings	1,685,110
Less: Treasury Stock	(115,500)
Total Stockholders Equity	1,569,610