Power Drive Corporation designs and produces a line of golf equipment and golf a

Question

Power Drive Corporation designs and produces a line of golf equipment and golf apparel. Power Drive has 100,000 shares of common stock outstanding as of the beginning of 2018. Power Drive has the following transactions affecting stockholders' equity in 2018 March 1 Issues 65,000 additional shares of $1 par value common stock for $62 per share May 10 Repurchases 6,000 shares of treasury stock for $65 per share June 1 Declares a cash dividend of $2.00 per share to all stockholders of record on June 15. (Hint: Dividends are not paid on treasury stock.) July 1 Pays the cash dividend declared on June 1 October 21 Reissues 3,000 shares of treasury stock purchased on May 10 for $70 per share Power Drive Corporation has the following beginning balances in its stockholders' equity accounts on January 1, 2018: Common Stock, $100,000; Additional Paid-in Capital, $5,500,000; and Retained Earnings, $3,000,000. Net income for the year ended December 31, 2018, is $700,000 Required: Prepare the statement of stockholders' equity for Power Drive Corporation for the year ended December 31, 2018. (Amounts to be deducted should be indicated by a minus sign.) POWER DRIVE CORPORATION Statement of Stockholders' Equity For the Year Ended December 31, 2018 Total Additional Paid-in Capital Retained Earnings Common Stock Treasury Stock Stockholders Equity $100,000 5,500,000$ 3,000,000 $ 0 $ 8,600,000 Balance, January 1 Issued common stock Purchase treasury stock Dividends Sale of treasury stock Net income Balance, December 31

Explanation / Answer

Power Drive Corporation Statement of Stockholder's Equity for the year ended December 31,2018 Addittional Retained Treasury total Common paid in Earnings stock Stockholders Stock capital Equity Balance,January 1 100,000 5,500,000 3,000,000 0 8,600,000 Issued common stock 65,000 3965000 0 0 4,030,000 purchase treasury stock -390000 -390000 Dividends -318000 -318000 Sale of Treasury stock 15,000 195000 210000 Net Income 700,000 700000 Balance,December 31 165,000 9,480,000 3,382,000 -195,000 12,832,000 dividends = 100,000+65000-6000 159000 shares on which dividend is declared

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