The stockholders\' equity of Verrecchia Company at December 31, 2008, follows: C
ID: 2388230 • Letter: T
Question
The stockholders' equity of Verrecchia Company at December 31, 2008, follows:
Common stock, $5 par value, 350,000 shares authorized;
170,000 shares issued and outstanding
$850,000
Paid-in capital in excess of par value
600,000
Retained earnings
346,000
During 2009, the following transactions occurred:
Jan. 5
Issued 10,000 shares of common stock for $11 cash per share.
Jan. 18
Purchased 4,000 shares of common stock for the treasury at $15 cash per share.
Mar. 12
Sold one-fourth of the treasury shares acquired January 18 for $19 cash per share.
July 17
Sold 500 shares of the remaining treasury stock for $14 cash per share.
Oct. 1
Issued 5,000 shares of 8%, $24 par value preferred stock for $40 cash per share.
This is the first issuance of preferred shares from the 50,000 authorized shares.
Prepare the December 31, 2009, stockholders' equity section of the balance sheet assuming that the company reports net income of $72,500 for the year.
Stockholders' Equity
Paid-in capital:
8% Preferred stock, $24 par value,
50,000 shares authorized, 5,000
shares issued and outstanding:
Common stock, $5 par value, 350,000
shares authorized; 180,000 shares
issued:
Additional paid-in capital
Paid-in capital in excess of par
value-preferred stock:
Paid-in capital in excess of par
value-common stock:
Paid-in capital from treasury stock:
Total paid-in capital:
Retained earnings:
Less: Treasury stock (2,500 shares) at cost
:
Total Stockholders' Equity:
Common stock, $5 par value, 350,000 shares authorized;
170,000 shares issued and outstanding
$850,000
Paid-in capital in excess of par value
600,000
Retained earnings
346,000
Explanation / Answer
Stockholders' Equity
Paid-in capital:
8% Preferred stock, $24 par value,
50,000 shares authorized, 5,000
shares issued and outstanding:
120,000
Common stock, $5 par value, 350,000
shares authorized; 180,000 shares
issued:
900,000
Additional paid-in capital
Paid-in capital in excess of par
value-preferred stock:
80,000
Paid-in capital in excess of par
value-common stock:
660,000
Paid-in capital from treasury stock:
3,500
Total paid-in capital:
1,763,500
Retained earnings:
418,500
Less: Treasury stock (2,500 shares) at cost
(37,500)
Total Stockholders' Equity:
2,144,500
Stockholders' Equity
Paid-in capital:
8% Preferred stock, $24 par value,
50,000 shares authorized, 5,000
shares issued and outstanding:
120,000
Common stock, $5 par value, 350,000
shares authorized; 180,000 shares
issued:
900,000
Additional paid-in capital
Paid-in capital in excess of par
value-preferred stock:
80,000
Paid-in capital in excess of par
value-common stock:
660,000
Paid-in capital from treasury stock:
3,500
Total paid-in capital:
1,763,500
Retained earnings:
418,500
Less: Treasury stock (2,500 shares) at cost
(37,500)
Total Stockholders' Equity:
2,144,500
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