Homework SourseThe following is a summary of all relevant transactions of P
The following is a summary of all relevant transactions of Pharoah Corporation since it was organized in 2017.
In 2017, 16,200 shares were authorized and 7,200 shares of common stock ($60 par value) were issued at a price of $66.
In 2018, 1,100 shares were issued as a stock dividend when the stock was selling for $70. 320 shares of common stock were bought in 2019 at a cost of $74 per share. These 320 shares are still in the company treasury.
In 2018, 9,300 preferred shares were authorized and the company issued 4,800 of them ($100 par value) at $118. Some of the preferred stock was reacquired by the company and later reissued for $4,510 more than it cost the company. The corporation has earned a total of $603,900 in net income after income taxes and paid out a total of $303,700 in cash dividends since incorporation.
Prepare the stockholders’ equity section of the balance sheet in proper form for Pharoah Corporation as of December 31, 2019. Account for treasury stock using the cost method. (Enter account name only. Do not provide descriptive information.)
Solution
Workings:
| PHAROAH CORPORATION | |
| Balance Sheet (Partial) | |
| December 31, 2019 | |
| Stockholders\' Equity | |
| Preferred stock | 480000 |
| Common stock | 498000 |
| Paid-in capital in excess of par value, preferred stock | 90910 |
| Paid-in capital in excess of par value, common stock | 54200 |
| Total contributed capital | 1123110 |
| Retained Earnings | 223200 |
| Less: Treasury stock (at cost) | -23680 |
| Total stockholders\' equity | 1322630 |
