On January 1, 2010, Yadier Inc. had the following stockholders\' equity account

Question

On January 1, 2010, Yadier Inc. had the following stockholders' equity account balances.

Common Stock, no-par value (496,000 shares issued) $1,488,000
Common Stock Dividends Distributable 185,000
Retained Earnings 561,000


During 2010, the following transactions and events occurred.

Issued 54,560 shares of common stock as a result of a 11 % stock dividend declared on December 15, 2009.

Issued 27,000 shares of common stock for cash at $6 per share.

Corrected an error that had understated the net income for 2008 by $72,000.

Declared and paid a cash dividend of $76,000.

Earned net income of $273,000.

Instructions
Prepare the stockholders' equity section of the balance sheet at December 31, 2010.

YADIER INC.
Stockholders' Equity Section of Balance Sheet
December 31, 2010

Stockholders' equity
Paid-in capital
Capital stock
Common stock, no-par value,
____________ shares issued and outstanding $___________
Retained earnings ___________

Total stockholders' equity $ ________________

Explanation / Answer

YADIER INC.
Stockholders' Equity Section of Balance Sheet
December 31, 2010

Stockholders' equity
Paid-in capital
Capital stock
Common stock, no-par value,
577,560 shares issued and outstanding $1,835,000
Retained earnings $830,000

Total stockholders' equity $ 2,665,000

Figures: Shares = 496,000 + 54,560 + 27,000; common stock account = 1,488,000 + 185,000 + 6*27,000; retained earnings = 561,000 + 72,000 – 76,000 + 273,000

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