Question
Exercise 10-7A Prepare the stockholders' equity section (LO10-7) Finishing Touches has two classes of stock authorized: 8%, $10 par preferred, and $1 par value common.
Exercise 10-7A Prepare the stockholders' equity section (LO10-7)
Finishing Touches has two classes of stock authorized: 8%, $10 par preferred, and $1 par value common. The following transactions affect stockholders' equity during 2021, its first year of operations:
January | 2 | Issues 100,000 shares of common stock for $35 per share. | ||
February | 6 | Issues 3,000 shares of 8% preferred stock for $11 per share. | ||
September | 10 | Purchases 11,000 shares of its own common stock for $40 per share. | ||
December | 15 | Resells 5,500 shares of treasury stock at $45 per share. |
In its first year of operations, Finishing Touches has net income of $160,000 and pays dividends at the end of the year of $94,500 ($1 per share) on all common shares outstanding and $2,400 on all preferred shares outstanding. Required: Prepare the stockholders' equity section of the balance sheet for Finishing Touches as of December 31, 2021. (Amounts to be deducted should be indicated by a minus sign.)
7 Prepare the stockholders' equity section of the balance sheet for Finishing Touches as of December 31, 2021. (Amounts to deducted should be indicated by a minus sign.) FINISHING TOUCHES Balance Sheet (Stockholders' Equity Section) December 31, 2021 10 points eBook Stockholders' equity Preferred stock Common stock Additional paid-in capital Hint 30,000 Print 100,000 References Total paid-in capital 130,000 Total stockholders' equity 130,000
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