Finishing Touches has two classes of stock authorized 8 10 p

Finishing Touches has two classes of stock authorized: 8%, $10 par preferred, and $1 par value common. The following transactions affect stockholders\' equity during 2018, its first year of operations:

January 2 Issues 100,000 shares of common stock for $25 per share.

February 6 Issues 2,000 shares of 8% preferred stock for $12 per share.

September 10 Repurchases 10,000 shares of its own common stock for $30 per share.

December 15 Reissues 5,000 shares of treasury stock at $35 per share.

In its first year of operations, Finishing Touches has net income of $150,000 and pays dividends at the end of the year of $95,000 ($1 per share) on all common shares outstanding and $1,600 on all preferred shares outstanding.

Required:

Prepare the stockholders\' equity section of the balance sheet for Finishing Touches as of December 31, 2018.

FINISHING TOUCHES
Balance Sheet
(Stockholders’ Equity Section)
December 31, 2018
Stockholders’ equity:
Common stock
Preferred stock

Additional paid-in capital
Total paid-in capital
Retained earnings
Treasury stock

Total stockholders’ equity

SOLUTION

FINISHING TOUCHES

Balance Sheet

(Stockholders’ Equity Section)

December 31, 2018

	Amount ($)	Amount ($)
Paid in capital
Common Stock (95,000 shares @ 1 per share)		95,000
Preferred Stock (2,000 shares @ $10 per preferred share)		20,000
Additional Paid in capital:
Common stock ([25-1]100,000)+ ([35-1]5,000)	2,570,000
Preferred Stock (2,000*2)	4,000
Total Additional paid in capital		2,574,000
Total Paid in capital		1,689,000
Add: Retained earnings (149000-94000-1330)		53,400
		2,742,400
Less: Treasury Stock [(10,00030)-(5,00035)]		(125,000)
STOCKHOLDER\'S EQUITY		2,617,400

$Finishing Touches has two classes of stock authorized: 8%, $10 par preferred, and $1 par value common. The following transactions affect stockholders\' equity d$

Finishing Touches has two classes of stock authorized 8 10 p

Solution

Get Help Now

Submit a Take Down Notice