Stockholders\' Equity Section of Balance Sheet Specialty Auto Racing Inc. retail

Question

Stockholders' Equity Section of Balance Sheet Specialty Auto Racing Inc. retails racing products for BMWs, Porsches, and Ferraris. The following accounts and their balances appear in the ledger of Specialty Auto Racing Inc. on July 31, the end of the current year: Common Stock, $10 par Paid-In Capital from Sale of Treasury Stock-Common 36,200 Paid-In Capital in Excess of Par-Common Stock Paid-In Capital in Excess of Par-Preferred Stock Preferred 4% Stock, $50 par Retained Earnings Treasury Stock-Common Fifty thousand shares of preferred and 200,000 shares of common stock are authorized. There are 3,200 shares of common stock held as treasury stock. $480,000 144,000 57,300 955,000 2,040,500 35,200 Prepare the Stockholders' Equity section of the balance sheet as of July 31, the end of the current year using Method 1 of Exhibit 8 Specialty Auto Racing Inc Stockholders' Equity 31, 20XX Paid-In Capital: Total Paid-In Capital Total Total Stockholders' Equity

Explanation / Answer

Prepare shareholder's equity section

Paid in capital Common stock 480000 Preferred stock 955000 Total capital stock 1435000 paid in capital in excess of par value-common stock 144000 Paid in capital in excess of par value-preferred stock 57300 Total additional paid in capital 201300 Paid in capital from sale of treasury stock 36200 Total paid in capital 1672500 Retained earnings 2040500 Total 3713000 Less;Treasury stock (35200) Total stockholder's equity 3677800

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