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 $23 per share. February 6 Issues 1,800 shares of 8% preferred stock for $12 per share. September 10 Purchases 10,000 shares of its own common stock for $28 per share. December 15 Resells 5,000 shares of treasury stock at $33 per share. In its first year of operations, Finishing Touches has net income of $148,000 and pays dividends at the end of the year of $95,000 ($1 per share) on all common shares outstanding and $1,440 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.) FINISHING TOUCHES Balance Sheet (Stockholders' Equity Section) December 31, 2021 Stockholders' equity: Total paid-in capital 0 Total stockholders' equity $ 0 6 Exercise 10-6A Record issuance of stock and treasury stock transactions (LO10-2, 10-3, 10-4) 10 points Finishing Touches has two classes of stock authorized: 7%, $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 $15 per share. February 6 Issues 1,000 shares of 7% preferred stock for $13 per share. September 10 Purchases 12,000 shares of its own common stock for $20 per share. December 15 Resells 6,000 shares of treasury stock at $25 per share. Required: Record each of these transactions. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) No Date 1 January 02, 2021 Cash Common Stock Additional Paid-in Capital Answer is complete and correct. General Journal Debit Credit 1,500,000 100,000 1,400,000 2 February 06, 2021 Cash 13,000 Preferred Stock Additional Paid-in Capital 10,000 3,000 3 September 10, 202 Treasury Stock Cash 4 December 15, 202 Cash Treasury Stock Additional Paid-in Capital 240,000 240,000 150,000 120,000 30,000 Return to
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started