E12-5

Twin Lakes incorporated on April 01, 2015, and was authorized to issue 100,000 shares of $5 par value common stock and 10,000 shares of $8, no-par preferred stock.During the remainder of 2015, the company entered into the following transactions:

1.Issued 25,000 shares of common stock in exchange for $500,000 cash.

2.Issued 5,000 shares of preferred stock in exchange for $60,000 cash.

3.Purchased 3,000 common shares for $15 per share and held them in the form of treasury stock.

4.Sold 1,000 treasury stock shares for $18 per share on the open market.

5.Issued 1,000 treasury shares to executives who exercised stock options for a reduced price of $5 per share.

The company entered into no other transactions that affected the shareholders' equity during 2015.

B. Assume the twin lakes generated $500,000 in net income in 2015 and did not declare any dividends during 2015. Prepare the shareholders equity statement of the balance sheet as of December 31, 2015