Requirement 5. Prepare the stockholders' equity section of the Richard Corporation balance sheet at December 31, 2018. Assume net income for the year is $75,000.(Enter the accounts in the proper order for the stockholders' equity section of the balance sheet.)

Richard Corporation was organized in 2017. At December 31, 2017, Richard Corporation's balance sheet reported the following stockholders' equity: (Click the icon to view the balance sheet information.) Read the requirements. Requirement 1. What does the 7 percent mean for the preferred stock? After Richard Coporation issues preferred stock, how much in annual cash dividends would it expect to pay on 10,000 shares? The 7% for the preferred stock represents the annual dividend rate. After Richard Coporation issues preferred stock, how much in annual cash dividends would Richard Corporation expect to pay on 10,000 shares? Start by determining the formula needed to calculate the dividends on the preferred stock. Shares outstanding Par value per share Dividend rate = Preferred dividends Now, using the formula you determined above, complete the sentence below. After the company issues preferred stock, it can expect to pay $ 3,500 in annual cash dividends on 10,000 shares. Requirement 2. At what price per share did Richard Corporation issue the common stock during 2017? Select the formula needed and then enter the amounts to calculate the issue price per share. (Round to the nearest cent.) ( Common stock + Paid-in capital in excess of par )/ Common shares issued = Issue price $ 9.00 ( 12,000 + 42,000 ) / 6,000 Requirement 2. At what price per share did Richard Corporation issue the common stock during 2017? Select the formula needed and then enter the amounts to calculate the issue price per share. (Round to the nearest cent.) Common stock Common shares issued = Issue price ( ( $ + Paid-in capital in excess of par )/ 42,000 )/ 12,000 + 6,000 = $ 9.00 Requirement 3. Were the first-year operations profitable? Give your reason. Yes, first year operations were profitable as shown by the positive balance in Retained earnings . Requirement 4. During 2018, the company completed the following selected transactions. Journalize each transaction. Explanations are not required. (Record debits first, then credits. Exclude explanations from any journal entries.) a. Issued for cash 5,000 shares of preferred stock at par value. Journal Entry Date Accounts Debit Credit a. Cash 25,000 Preferred stock 25,000 b. Issued for cash 2,100 shares of common stock at a price of $6.00 per share. Journal Entry Date Accounts Debit Credit b. Cash 12,600 Common stock 4,200 Paid-in capital in excess of par-common 8,400 Requirement 5. Prepare the stockholders' equity section of the Richard Corporation balance sheet at December 31, 2018. Assume net income for the year is $75,000. (Enter the accounts in the proper order for the stockholders' equity section of the balance sheet.) Stockholders' Equity 5,000 shares issued and outstanding 25,000 Paid-in capital: Preferred stock, 7%, $5 par, 35,000 shares authorized, Common stock, $2 par, 100000 shares authorized, Paid-in capital in excess of par-common Total paid-in capital 8,100 shares issued and outstanding 16,200 Retained earnings Total stockholders' equity - Data table Stockholders' Equity Paid-in capital: $ 0 Preferred stock, 7%, $5 par, 35,000 shares authorized, none issued Common stock, $2 par, 100,000 shares authorized, 6,000 shares issued and outstanding 12,000 42,000 Paid-in capital in excess of parcommon Total paid-in capital $ 54,000 4,000 Retained earnings (deficit) $ 58,000 Total stockholders' equity