A company has two classes of stock authorized: 8%, $10 par preferred, and $1 par...
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Accounting
A company has two classes of stock authorized: 8%, $10 par preferred, and $1 par value common. The following transactions affect stockholders' equity during Year 1, its first year of operations:
January
2
Issues 100,000 shares of common stock for $17 per share.
February
6
Issues 1,200 shares of 8% preferred stock for $12 per share.
September
10
Purchases 10,000 shares of its own common stock for $22 per share.
December
15
Resells 5,000 shares of treasury stock at $27 per share.
In its first year of operations, the company has net income of $142,000 and pays dividends at the end of the year of $95,000 ($1 per share) on all common shares outstanding and $960 on all preferred shares outstanding.
Required: Prepare the stockholders' equity section of the balance sheet for the company as of December 31, Year 1. (Amounts to be deducted should be indicated by a minus sign.) Show your work!
Balance Sheet (Stockholders' Equity Section) December 31, Year 1 Stockholders' equity: Preferred stock Common stock Additional paid-in capital 0 Total paid-in capital Retained earnings Treasury stock Total stockholders' equity $ 0
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