Hap Company’s records indicated the following account balances at December 31, 2

Question

Hap Company’s records indicated the following account balances at December 31, 2018:

Retained earnings                                                                                                            $420,000

Unrealized increased in fair value of available for sale securities                  19,000

Paid-in capital in excess of par on preferred stock                                             50,000

Paid-in capital in excess of par on common stock                                               100,000

Paid-in capital in excess of par from stock options (common)                       10,000

Paid-in capital in excess of par from treasury stock                                            8,000

Common stock ($1 par value)                                                                                     10,000

Preferred stock ($20 par value)                                                                                  20,000

Treasury Stock – Common (at Cost)                                                                          7,000

Other information:

Common stock has 100,000 shares authorized, 10,000shares issued & outstanding. Preferred stock pays a 10% dividend, is on non-cumulative on callable at $100 per share and has 10,000 shares authorized, 1,000 shares issued & outstanding. Hap has reacquired & holds 100 shares of its own common stock (treasury)

Required: prepare the stockholder’s equity section of the balance sheet for hap -in proper form, including appropriate parenthetical disclosure & subtotal

Explanation / Answer

Stockholder's equity of Hap as at 31st December,2018 Sl.no Particulars Amount $ A Paid in Capital A 10% Non-Cumulative Preferred stock, $ 20 Par value, 10,000 shares authorised, 1,000 shares Issued and outstanding      20,000.00 2 Paid in capital in excess of par on above preferred stock      50,000.00 3 Common stock, $ 1 Par value, 100,000 shares authorised, 10,000 shares Issued and outstanding      10,000.00 4 Paid in capital in excess of par on above common stock 1,00,000.00 5 Paid-in capital in excess of par from stock options (common)           10,000.00 6 Paid-in capital in excess of par from treasury stock        8,000.00 Total Paid in capital 1,98,000.00 8 Retained earnings 4,20,000.00 7 Accumulated comprehensive income      19,000.00 9 Less: Treasury Stock       -7,000.00 Total Stockholder's equity 6,30,000.00

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