Exercise 10-78 Prepare the stockholders' equity section (LO10-7) A company has two classes of stock authorized: 8%, $10 par preferred, and $1 par value common. The following transactions af stockholders' equity during Year 1. its first year of operations: January 2 Issues 100,000 shares of common stock for $25 per share. February 6 Issues 2,000 shares of 8% preferred stock for $12 per share. September 10 Purchases 10,000 shares of its own common stock for $30 per share. December 15 Resells 5,000 shares of treasury stock at $35 per share. ces In its first year of operations, the company has net income of $150.000 and pays dividends at the end of the year of $95.000 ($1 share) on all common shares outstanding and $1,600 on all preferred shares outstanding, Required: Prepare the stockholders' equity section of the balance sheet for the company as of December 31. Year 1. (Amounts to be deduct should be indicated by a minus sign.) Balance Sheet (Stockholders' Equity Section) December 31, Year 1 Stockholders' equity Common stock $ 100.000 Preferred stock 2.500.000 Additional paid in capital es Balance Sheet (Stockholders' Equity Section) December 31, Year 1 Stockholders' equity: Common stock 100.000 Preferred stock 2,500,000 Additional paid-in capital 0 $ Total paid-in capital 2.600.000 Total stockholders' equity $ 2 600.000