The stockholders\' equity section of Kay Corporation at December 31, 2005 includ

Question

The stockholders' equity section of Kay Corporation at December 31, 2005 included the following accounts:

Preferred stock (9%, $40 par, 6,000 shares issued & outstanding) ........ $240,000

Common stock ($8 par, 65,000 shares issued, 61,000 shares outstanding) ....... 520,000

Paid-in capital – preferred stock ....................................... ?

Paid-in capital – common stock .......................................... 584,000

Retained earnings ....................................................... 152,000

Treasury stock (4,000 shares at $15 cost) .............................. 60,000

Assume the preferred stock was issued for an average price of $48 per share. Calculate the total stockholders' equity at December 31, 2005.

Explanation / Answer

Stockholders' equity at December 31, 2005 Paid in capital Preferred stock (9%, $40 par, 6,000 shares issued & outstanding) $   2,40,000 Common stock ($8 par, 65,000 shares issued, 61,000 shares outstanding) $   5,20,000 Paid-in capital – preferred stock [ 6000 shares x ($48-$40) / share] $ 48,000 Paid-in capital – common stock $   5,84,000 Retained earnings $   1,52,000 $ 15,44,000 Less: treasury stock at cost $ 60,000 Stockholders' equity $ 14,84,000

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