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 2015. Power Drive has the following transactions affecting stockholders' equity in 2015.

12. 5.55 points Power Drive Corporation designs and produces a line of golf equipment and golf apparel. Power Drive has 1 100,000 shares of common stock outstanding as of the beginning of 2015. PoweDrive has the following transactions affecting stockholders' equity in 2015 Issues 65,000 additional shares of $1 par value common stock for $62 per share Repurchases 6,000 shares of treasury stock for $65 per share 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.) Pays the cash dividend declared on June 1 Reissues 3,000 shares of treasury stock purchased on May 10 for $70 per share March May June 1 10 1 6 July 1 October 21 Power Drive Corporation has the following beginning balances in its stockholders' equity accounts on January 1, 2015: 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, 2015, is $700,000 Required Prepare the statement of stockholders equity for Power Drive Corporation for the year ended December 31 2015. (Amounts to be deducted should be indicated by a minus sign.) POWER DRIVE CORPORATION Statement of Stockholders' Equity For the Year Ended December 31, 2015 Total Additional Common Stock Paid-in Capital Retained Earnings Treasury Stock Stockholders Balance, January 1 Issue common stock Purchase treasury stock Cash dividends Sale of treasury stock Net income Balance, December 31 100,000 $ 5,500,000 $ 3,000,000 $ 0 $ 8,600,000

Explanation / Answer

Workings

Common
Stock Additional
Paid-in
Capital Retained
Earnings Treasury
Stock Total
Stockholders'
Equity Balance, January 1 100000 5500000 3000000 0 8600000 Issue common stock 65000 3965000 0 0 4030000 purchase of treasury stock -390000 -390000 Cash dividend -318000 -318000 Sold treasury stock 15000 195000 210000 Net Income 700000 700000 Balance December 31 165000 9480000 3382000 -195000 12832000

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