Thomson Corporation Stockholder\'s Equity December 31, 2013 Common stock (40,000

Question

Thomson Corporation Stockholder's Equity December 31, 2013 Common stock (40,000 authorized, 25,000 issued and outstanding with par value of $10 per share.) 250,000.00 Excess paid in capital on common stock $125,000.00 Retained Earnings Total stockholder's equity 500,000.00 875,000.00 During the current year, Thomson had the following stock transactions: The company authorizes the sale of 10% preferred stock, 50,000 shares at par value of 550. Sold 20,000 shares of preferred stock at $75 per share. Purchased 5,000 shares of common stock at $20 per share for cash Declared and distributed a 2% stock dividend to common stock price was $25 per share Declared and paid $90,000 in cash dividends to common and preferred stockholders holders when market Sold 2,000 shares of treasury stock at $16 per share. Net loss is $134,000. Required 1. Prepare the stockholder's equity section of the balance sheet for year-end 2013. ?2

Explanation / Answer

Solution:

Stockholder Equity Section of Balance sheet Thomson Corporation at December 31, 2013 Particulars Amount Stockholders Equity: Common Stock, $10 Par value, 40000 shares authorized, 25400 shares issued and outstanding (25000+20000*2%)*$10 $254,000.00 Preferred Stock, $50 Par value, 50000 shares authorized, 20000 shares issued and outstanding 20000*$50 $1,000,000.00 Paid in Capital in Excess of Par - Common Stock ($125,000)+(400*$15) $131,000.00 Paid in Capital in Excess of Par - Preferred Stock 20000*$25 $500,000.00 Retained Earnings (Beginning balance - Net loss - Cash dividend - Stock Dividend - Loss on sale of treasury stock) ($500,000 - $134,000 - $90,000 - 400*$25 - 2000*$4) $258,000.00 Treasury Stock 3000*$20 -$60,000.00 Total Stockholder's Equity $2,083,000.00

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