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Major League Apparel has two classes of stock authorized: 5%, $10 par preferred, and $1 par value common. The following transactions affect stockholders equity during
Major League Apparel has two classes of stock authorized: 5%, $10 par preferred, and $1 par value common. The following transactions affect stockholders equity during 2021, its first year of operations:
January | 2 | Issue 100,000 shares of common stock for $69 per share. | ||
February | 14 | Issue 59,000 shares of preferred stock for $11 per share. | ||
May | 8 | Purchase 10,000 shares of its own common stock for $59 per share. | ||
May | 31 | Resell 5,000 shares of treasury stock for $64 per share. | ||
December | 1 | Declare a cash dividend on its common stock of $0.30 per share and a $29,500 (5% of par value) cash dividend on its preferred stock payable to all stockholders of record on December 15. The dividend is payable on December 30. (Hint: Dividends are not paid on treasury stock.) | ||
December | 30 | Pay the cash dividends declared on December 1. |
2. Prepare the stockholders equity section of the balance sheet as of December 31, 2021. Net income for the year was $489,000. (Amounts to be deducted should be indicated by a minus sign.)
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