In 2010, Lee Ann Adams and some college friends organized The Candy Jar, a gourmet candy company.

Question:

In 2010, Lee Ann Adams and some college friends organized The Candy Jar, a gourmet candy company. In 2010, The Candy Jar issued 150,000 of the 300,000 authorized shares of common stock, par value $15, for $3,000,000 and all the 50,000 authorized shares of 10%, $20 par, cumulative preferred stock for $1,100,000. Combined earnings for 2010, 2011, 2012, and 2013 amounted to $1,250,000. Dividends paid in the four years were as follows: 2010—$100,000; 2011—$300,000; 2012—$0; 2013—$150,000.

Required:

1. Prepare the stockholders’ equity section of the balance sheet as of December 31, 2013, for The Candy Jar.

2. Prepare the journal entry that would be necessary to record the dividends paid in 2013.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...