Peeler Company was incorporated as a new business on January 1, 2014. The corpor

Question

Peeler Company was incorporated as a new business on January 1, 2014. The corporate charter approved on that date the issuance of 1,000 shares of $100 par, 7% cumulative, non-participating preferred stock and 10,000 shares of $5 par common stock. On January 10, Peeler issued for cash 500 shares of preferred stock at $120 per share and 4,000 shares of common stock at $80 per share. On January 20, it issued 1,000 shares of common stock to acquire a building site at a time when the stock was selling for $70 per share. During 2014, Peeler established an employee benefit plan and acquired 500 shares of common stock at $60 per share as treasury stock for that purpose. Later in 2014, it resold 100 share of the stock at $65 per share. On December 31, 2014, Peeler determined its net income for the year to be $40,000. The firm declared the annual cash dividend to preferred stockholders and a cash dividend of $5 pet share to the common stockholders. The dividends will be paid in 2015. Required Develop the Stockholders' Equity category of Peeler's balance sheet as of December 31, 2014. Indicate on the statement the number of shares authorized, issued, and outstanding for both preffered and common stock.

Explanation / Answer

Cash............................$60,00...
Preferred Stock (500x$100)..........$50,000
Preferred Stock............................$10,000

Cash (4,000 x $80)......... $320,000
Common Stock (4,000x$80)........$20,000
APIC- Common Stock.................$320,000

Building (1,000x$70).......$70,000
Common Stock(1,000x$5)..........$5,000
APIC- Common Stock................$65,000

Treasury Stock (500x$60)....$30,000
Cash................................

Cash (100x$65).......$6,500
Treasury Stock.....................$6,000
APIC- Treasury Stock...........$500

Here's what I think the Stockholder's Equity category looks like:

Preferred Stock $100, 7%
500 issued, 500 outstanding...........$50,000
Common Stock $5
5,000 issued, 5,000 outstanding.....$25,000
Additional Paid-In Capital...................$105,500
Retained Earnings.............................$40...
___________
TOTAL STOCKHOLDER'S EQUITY.....$220,500

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