On January 1, 2014, Kessler Inc. had these stockholders’ equity balances. Common

Question

On January 1, 2014, Kessler Inc. had these stockholders’ equity balances. Common Stock, $1 par (2,555,100 shares authorized, 627,700 shares issued and outstanding) $627,700 Paid-in Capital in Excess of Par Value 1,550,100 Retained Earnings 693,400

During 2014, the following transactions and events occurred. 1. Issued 45,700 shares of $1 par value common stock for $2 per share. 2. Issued 61,500 shares of common stock for cash at $6 per share. 3. Purchased 15,300 shares of common stock for the treasury at $3.40 per share. 4. Declared and paid a cash dividend of $180,200. 5. Earned net income of $393,600.

Prepare the stockholders’ equity section of the balance sheet at December 31, 2014.

Explanation / Answer

Stock holders equity section of the balance sheet at Decemberr 31,2014:

Working notes:

Particulars Amount Common stock existing $734,900.00 Paid in excess of par value $1,903,300.00 Total paid in capital $2,638,200.00 Retained earnings $906,800.00 Subtotal $3,545,000.00 Minus:Treasury stock $52,020.00 Total $3,492,980.00

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