Question
Sweet Sixteen has the following beginning balances in its stockholders' equity accounts on January 1, 2021: preferred stock, $100,000, common stock, $20,000; additional paid-in capital,
Sweet Sixteen has the following beginning balances in its stockholders' equity accounts on January 1, 2021: preferred stock, $100,000, common stock, $20,000; additional paid-in capital, $380,000; and retained earnings, $450,000. Net income for the year ended December 31, 2021, is $65,000. The following transactions affected stockholders' equity during 2021:
March | 1 | Issues 3,000 additional shares of $1 par value common stock for $22 per share. | ||
April | 1 | Issues 5,000 additional shares of $100 par value preferred stock for $110 per share. | ||
June | 1 | Declares a cash dividend on common stock of $1 per share and a cash dividend on preferred stock of $5 per share to all stockholders of record on June 15. | ||
June | 30 | Pays the cash dividends declared on June 1. | ||
August | 1 | Purchases 2,000 shares of common treasury stock for $18 per share. | ||
October | 1 | Resells 1,000 shares of treasury stock purchased on August 1 for $20 per share. |
Taking into consideration the beginning balances and all the transactions during 2021, respond to the following for Sweet Sixteen:
Required:
Prepare the statement of stockholders equity for the year ended December 31, 2021.
Prepare the stockholders equity section of the balance sheet as of December 31, 2021.
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