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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,
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 a 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
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