Donnie Hilfiger has two classes of stock authorized 1 par pr

Donnie Hilfiger has two classes of stock authorized: $1 par preferred and $0.01 par value common. As of the beginning of 2015, 100 shares of preferred stock and 3,800 shares of common stock have been issued. The following transactions affect stockholders’ equity during 2015:

Declares a cash dividend on both common and preferred stock of $0.60 per share to all stockholders of record on December 15. (Hint: Dividends are not paid on treasury stock.)

Pays the cash dividends declared on Decembe

Donnie Hilfiger has the following beginning balances in its stockholders’ equity accounts on January 1, 2015: Preferred Stock, $100; Common Stock, $38; Additional Paid-in Capital, $74,000; and Retained Earnings, $29,500. Net income for the year ended December 31, 2015, is $10,600.

Taking into consideration all the transactions during 2015, respond to the following for Donnie Hilfiger:

Prepare the statement of stockholders’ equity for the year ended December 31, 2015. (Amounts to be deducted should be indicated by a minus sign.)

March	1	Issues 1,200 shares of common stock for $40 per share.
May	15	Repurchases 500 shares of treasury stock for $33 per share.
July	10	Reissues 300 shares of treasury stock purchased on May 15 for $38 per share.
October	15	Issues 300 shares of preferred stock for $43 per share.
December	1	Declares a cash dividend on both common and preferred stock of $0.60 per share to all stockholders of record on December 15. (Hint: Dividends are not paid on treasury stock.)
December	31	Pays the cash dividends declared on Decembe

Solution

DONNIE HILFIGER Statement of Stockholders\' Equity For the Year Ended December 31, 2015 Preferred Stock Common Stock Additional Paid-in Capital Retained Earnings Treasury Stock Total Stockholders\' Equity Remarks Balance, January 1 100 38 74000 29500 103638 Issue of common stock 12 47988 48000 Purchase of treasury stock 16500 -16500 Cost Method Applied Sale of treasury stock 1500 -9900 11400 Cost Method Applied Issued preferred stock 300 12600 12900 Cash dividends -3240 -3240 Net income 10600 10600 Balance, December 31 $ 400.00 $   50.00 $1,36,088.00 $36,860.00 $6,600.00 $1,66,798.00 No of sahres 400 5000