Preparing the Stockholders' Equity Section After Selected Transactions (P11-5)
Luther Company obtained a charter from the state in January 2011 which authorized 1,000,000 shares of common stock, $5 par value. During the first year, the company earned $429,000, and the following selected transactions occurred in the order given:
a. Sold 700,000 shares of the common stock at $54 per share. Collected the cash and issued the stock.
b. Purchased 25,000 shares at $50 cash per share to use as stock incentives for senior management.
Required:
Prepare the Stockholders’ Equity section of the balance sheet at December 31, 2011.
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