On November 1, 2009, Dazzling Desserts Corporation had 300,000 shares of $1 par common stock issued and

Question:

On November 1, 2009, Dazzling Desserts Corporation had 300,000 shares of $1 par common stock issued and outstanding. The shareholders’ equity accounts at November 1, 2009, had the following balances:

Common stock ...........$ 300,000

Additional paid-in capital ....... 2,700,000

Retained earnings ..........3,500,000

The following transactions occurred during the fiscal year ended October 31, 2010:

a. On November 30, issued 30,000 shares of 7%, $95 par, cumulative preferred stock at $100.

b. On December 31, reacquired 5,000 shares of common stock for $12 per share.

c. On January 1, declared a cash dividend of $0.75 per share on the common stock outstanding, payable on January 31, 2010, to shareholders of record on December 15.

d. Declared and paid dividends to preferred shareholders on March 1, 2010.

e. Net income for the year ended October 31, 2010, was $675,000.

Requirement

Prepare the shareholders’ equity section of Dazzling Desserts’ balance sheet at October 31, 2010.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... 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... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...