Finishing Touches has two classes of stock authorized: 8%, $10 par preferred, and $1 par...
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Accounting
Finishing Touches has two classes of stock authorized: 8%, $10 par preferred, and $1 par value common. The following transactions affect stockholders' equity during 2018, its first year of operations:
January 2 Issues 100,000 shares of common stock for $23 per share.
February 6 Issues 1,800 shares of 8% preferred stock for $12 per share.
September 10 Purchases 10,000 shares of its own common stock for $28 per share.
December 15 Reissues 5,000 shares of treasury stock at $33 per share.
In its first year of operations, Finishing Touches has net income of $148,000 and pays dividends at the end of the year of $95,000 ($1 per share) on all common shares outstanding and $1,440 on all preferred shares outstanding.
Required:
Prepare the stockholders' equity section of the balance sheet for Finishing Touches as of December 31, 2018. (Amounts to be deducted should be indicated by a minus sign.)
FINISHING TOUCHES
Balance Sheet
(Stockholders Equity Section)
December 31, 2018
Stockholders equity:
Common stock
$100,000
Preferred stock
18,000
Additional paid-in capital
Total paid-in capital
118,000
Treasury stock
Retained earnings
Total stockholders equity
$118,000
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