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Common stock (40,000 authorized, 25,000 issued and outstanding with p

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Common stock (40,000 authorized, 25,000 issued and
outstanding with par value of $10 per share.) $ 250,000.00
Excess paid in capital on common stock $ 125,000.00 The
company authorizes the sale of 10% preferred stock,
50,000 shares at par value of $10 per share.) During the
current year, Thompson had the following stock
transactions: The company authorizes the sale of 10%
preferred stock, 50,000 shares at par value of $50. Sold
20,000 shares of preferred stock at $75 per share.
Purchased 5,000 shares of common stock at $20 per share
for cash. Declared and distributed a 2% stock dividend to
common stockholders when market price was $25 per
share. Declared and paid $90,000 in cash dividends to
common and preferred stockholders. Sold 2,000 shares of
treasury stock at $16 per share. Net loss is $134,000.
Required: 1. Prepare the stockholder\'s equity section of
the balance sheet for year-end 2013.
Solution
Shareholders\' equity :
Capital Stock:
Sale of 10% preferred stock, 50,000 shares of par value
$50, sold 20,000 shares
40,000 common stock authorized, 30,000 issued at $10 par
value
1,000,000

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300,000
Additional paid in capital:
Paid in capital in excess of par- preferred stock
Paid in capital in excess of par- common stock
500,000
167,000
667,000
Retained Earnings
Less: Purchased 5000 shares of common stock at $20 per
share
Less: Cash dividends
Add: sale of 2000 treasury stock at $16
500,000
(100,000)
(90,000)
32,000
342,000
Working notes:
Common stock :
Issued : 25000 at $10 per share at par = 250,000
Additional purchased by the company: 5000 at $10 par
value = 50,000
Total common stock at par = 300,000
Additional paid in capital-common stock = 125,000
Additional paid in capital of treasury stock purchased by

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Common stock (40,000 authorized, 25,000 issued and outstanding with par value of $10 per share.) $ 250,000.00 Excess paid in capital on common stock $ 125,000.00 The company authorizes the sale of 10% preferred stock, 50,000 shares at par value of $10 per share.) During the current year, Thompson had the following stock transactions: The company authorizes the sale of 10% preferred stock, 50,000 shares at par value of $50. Sold 20,000 shares of preferred stock at $75 per share. Purchased 5,000 shares of common stock at $20 per share for cash. Declared and distributed a 2% stock dividend to common stockholders when market price was $25 per share. Declared and paid $90,000 in cash dividends to common and preferred stockholders. Sold 2,000 shares of treasury stock at $16 per share. Net loss is $134,000. Required: 1. Prepare the stockholder \'s equity section of the balance sheet for year-end 2013. Solution Shareholders\' equity : Capital Stock: Sale of 10% preferred stock, 50,000 shares of par value $50, sold 20,000 shares 40,000 common stock authorized, 30,000 issued at $10 par value 1,000,000 300,000 Additional paid in capital: Paid in capital in excess of par- preferred stock P ...
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