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P11-5 Preparing the Stockholders Equity Section after Selected Transactions LO11

ID: 2424614 • Letter: P

Question

P11-5 Preparing the Stockholders Equity Section after Selected Transactions LO11-1, 11-3

United Resources Company obtained a charter from the state in January 2014, which authorized 207,000 shares of common stock, $1 par value. During the first year, the company earned $489,000 and the following selected transactions occurred in the order given:

Prepare the stockholders’ equity section of the balance sheet at December 31, 2014. (Amounts to be deducted should be indicated with a minus sign.)

United Resources Company obtained a charter from the state in January 2014, which authorized 207,000 shares of common stock, $1 par value. During the first year, the company earned $489,000 and the following selected transactions occurred in the order given:

Explanation / Answer

United Resources Company Stockholder's Equity Section as on Dec. 31, 2014 Particulars Amount Common Stock Authorized Capital ( 207000 Shares @ $1)              207,000 Issued Capital (65000 Shares @ $1)                65,000 Paid in Capital in excess of Par (80000 Shares X $18)          1,440,000 Paid in Capital in excess of Par - Treasury Shares                21,000 (7000 Shares X $3) Retained Profit Net Profit earned During the Year              489,000 Less: Treasury Shares (15000 Shares X $22)           (330,000) Shareholders Equity Total          1,685,000