Stockholders’ Equity Section of the Balance Sheet The newly hired accountant at Grainfield Inc. is considering the following list of accounts as he prepares the balance sheet. All of the accounts have positive balances. The company is authorized to issue 1,000,000 shares of common stock and 10,000 shares of preferred stock. The treasury stock was purchased at $5 per share.

Required 1. Prepare the Stockholders’ Equity section of the balance sheet for Grainfield.
2. Explain why some of the listed accounts are not shown in the Stockholders’ Equity section.

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Treasury stock (common) Retained earnings $ 15,000 54,900 Dividends payable 1,500 Common stock, $1 par 100,000 Additional paid-in capital 68,400 Preferred stock, $10 par, 5% 50,000