Part 3: Equity Transactions

Prepare the stockholders' equity section for Reynolds Company at December 31, 2016. Show all supporting computations.

Reynolds Company has two classes of capital stock outstanding: 8%, $30 par preferred and $10 par common. At December 31, 2017, the following accounts were included in stockholders' equity.

Preferred Stock, 165,000 shares$ 4,950,000

Common Stock, 2,200,000 shares 22,000,000

Paid-in Capital in Excess of ParPreferred330,000

Paid-in Capital in Excess of ParCommon 45,100,000

Retained Earnings8,278,600

The following transactions affected stockholders' equity during 2018.

Jan. 1 30,000 shares of preferred stock issued at $45 per share.

Feb. 1 37,500 shares of common stock issued at $23 per share.

June 1 2-for-1 stock split (par value reduced to $5.00).

July 1 33,000 shares of common treasury stock purchased at $22 per share. Reynolds uses the cost method.

Sept. 15 11,000 shares of treasury stock reissued at $24 per share.

Dec. 31 The preferred dividend is declared, and a common dividend of 40 per share is declared.

Dec. 31 Net income is $3,492,5000.