Exercise 10-7 Prepare the stockholders' equity section (LO10-7)

Finishing Touches has two classes of stock authorized: 7%, $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 $24 per share.

February 6 Issues 1,900 shares of 7% preferred stock for $13 per share.

September 10 Repurchases 12,000 shares of its own common stock for $29 per share.

December 15 Reissues 6,000 shares of treasury stock at $34 per share.

In its first year of operations, Finishing Touches has net income of $149,000 and pays dividends at the end of the year of $94,000 ($1 per share) on all common shares outstanding and $1,330 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: Total paid-in capital Total stockholders' equity