Determining the Effects of Transactions on Stockholders’ Equity
Quick Fix-it Corporation was organized in January 2011 to operate several car rep air businesses in a large metropolitan area. The charter issued by the state authorized the following capital stock:
Common stock, $10 par value, 98,000 shares
Preferred stock, $50 par value, 8 percent. 59,000 shares
During January and February 2011, the following stock transactions were completed:
a.Sol d 78,000 shares of common stock at $20 per share and collected cash.
b.Sold 20,000 shares of preferred stock at $80 per share: collected the cash and immediately issued the stock.
c.Bought 4,000 shares of common stock from a current stockholder for $20 per share.
Required:
Net income for 2011 was $90,000: cash dividends declared and pa id at yea r-end were $30,000. Prepare the stockholders ‘ equity section of the balance sheet at Dec ember 31. 2011.
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