Question
Finishing Touches has two classes of stock authorized: 8%, $10 par preferred, and $1 par value common. The following transactions affect stockholders' equity during 2024,
Finishing Touches has two classes of stock authorized: 8%, $10 par preferred, and $1 par value common. The following transactions affect stockholders' equity during 2024, 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, 2024. (Amounts to be deducted should be indicated by a minus sign.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored 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