The Clothing Cove has two classes of stock authorized 9 , $10 par preferred, and $1 par value common The following transactions affect stockholders' equity during 2024, its first year of operations January 2 Issues 100,000 shares of common stock for $32 per share February 6 Issues 2,700 shares of 9 preferred stock for $11 per share September 10 Purchases 11,000 shares of its own common stock for $37 per share December 15 Resells 5,500 shares of treasury stock at $42 per share In its first year of operations, The Clothing Cove has net income of $157,000 and pays dividends at the end of the year of $94,500 ($1 per share) on all common shares outstanding and $2,430 on all preferred shares outstanding Required Prepare the stockholders' equity section of the balance sheet for The Clothing Cove as of December 31, 2024 Prepare the stockholders' equity section of the balance sheet for The Clothing Cove as of December 31, 2024 (Amounts to be deducted should be indicated by a minus sign )

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 11, 2024

The Clothing Cove has two classes of stock authorized: 9%, $10 par preferred, and $1 par value common. The following transactions affect stockholders' equity during

The Clothing Cove has two classes of stock authorized: 9%, $10 par preferred, and $1 par value common. The following transactions affect stockholders' equity during 2024, its first year of operations:

January 2		Issues 100,000 shares of common stock for $32 per share.
February 6		Issues 2,700 shares of 9% preferred stock for $11 per share.
September 10		Purchases 11,000 shares of its own common stock for $37 per share.
December 15		Resells 5,500 shares of treasury stock at $42 per share.

In its first year of operations, The Clothing Cove has net income of $157,000 and pays dividends at the end of the year of $94,500 ($1 per share) on all common shares outstanding and $2,430 on all preferred shares outstanding.

Required:

Prepare the stockholders' equity section of the balance sheet for The Clothing Cove as of December 31, 2024 image text in transcribed

Prepare the stockholders' equity section of the balance sheet for The Clothing Cove as of December 31, 2024. (Amounts to be deducted should be indicated by a minus sign.)