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Sandhill Company reported the following amounts in the stockholders equity section of its December 31, 2019, balance sheet. Preferred stock, 12%, $100 par (100,000 shares
Sandhill Company reported the following amounts in the stockholders equity section of its December 31, 2019, balance sheet.
Preferred stock, 12%, $100 par (100,000 shares authorized, 27,000 shares issued) | $2,700,000 | |
Common stock, $1 par (1,000,000 shares authorized, 277,000 shares issued) | 277,000 | |
Additional paid-in capital-common | 956,000 | |
Retained earnings | 1,349,000 | |
Total | $5,282,000 |
During 2020, Sandhill took part in the following transactions concerning stockholders equity.
1. | Paid the annual 2019 dividend on preferred stock and a $0.50 per share dividend on common stock. These dividends had been declared on December 31, 2019. | |
2. | Purchased 1,100 shares of its own outstanding common stock for $8 per share. Sandhill uses the cost method. | |
3. | Reissued 1,100 treasury shares for land with an appraised value of $9,500. Sandhills common shares were trading for $8.50 per share. | |
4. | Issued 52,000 shares of common stock at $9 per share. | |
5. | Declared and recorded a 2:1 stock split on the outstanding common stock when the stock is selling for $10 per share. | |
6. | Declared the annual 2020 dividend on preferred stock and the $0.50 per share dividend on common stock. These dividends are payable in 2021. |
Prepare the December 31, 2020, stockholders equity section. Assume 2020 net income was $609,000.
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