2. Court Casuals has the following beginning balances in its stockholders\' Comm

Question

2. Court Casuals has the following beginning balances in its stockholders' Common stock, $100,000; paid-in capital, $4,100,000; and retained earnings, $3,000,000. Net income for the year ended December 31, 2010, is $800,000. Court Casuals has the following transactions affecting stockholders equity in 2010. equity accounts on January 1, 2010 May 18 May 31 July 1 Issues 25,000 additional shares of SI par value common stock for $40 per share. Repurchases 5,000 shares of treasury stock for $45 per share. Declares a cash dividend of $1 per share to all stockholders of record on July 15. Hint: Dividends are not paid on treasury stock Pays the cash dividend declared on July 1. Reissues 2.500 shares of treasury stock purchased on May 31 for S48 per share. July 31 August 10 Taking into consideration all the entries described above, prepare the statement of stockholders' equity for the year ended December 31, 2010, using the format provided. Court Casuals Statement of Stockholders' Equity For the year ended December 31, 2010 Additional Common Paid-in Retained Treasury Stockholders Stock Capital Earmings Steek $7200 000

Explanation / Answer

Prepare stockholder's equity statement :

Common stock Additional paid in capital Retained earnings Treasury stock Total stockholder's equity Balance january 1 100000 4100000 3000000 7200000 Issue of common stock 25000 975000 1000000 Repurchase treasury stock (225000) (225000) Cash dividends (120000) (120000) Sold treasury stock 7500 112500 120000 Net income 800000 800000 Balance december 31 125000 5082500 3680000 (112500) 8775000

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