Quick Fix-it Corporation was organized in January 2014 to operate several car re

Question

Quick Fix-it Corporation was organized in January 2014 to operate several car repair businesses in a large metropolitan area. The charter issued by the state authorized the following capital stock: Common stock, $18 par value, 99,000 shares Preferred stock, $42 par value, 8 percent, 59,400 shares During January and February 2014, the following stock transactions were completed: a. Sold 79,300 shares of common stock at $36 per share and collected cash. b. Sold 21,900 shares of preferred stock at $76 per share; collected the cash and immediately issued the stock. c. Bought 6,000 shares of common stock from a current stockholder for $24 per share. Required: Net income for 2014 was $92,000; cash dividends declared and paid at year-end were $30,000. Prepare the stockholders’ equity section of the balance sheet at December 31, 2014. (Amounts to be deducted should be indicated with a minus sign.)

Explanation / Answer

Required : Stockholders’ equity section of the balance sheet at December 31, 2014:

STOCKHOLDERS EQUITY: AMOUNT ($)

AUTHORISED : 99000 AT PAR $18 1782000

ISSUED SHARES: 79,300 AT PAR $18 1427400

LESS: TREASARY SHARES BOUGHT 6000 (108000)

   1319400

EXCESS OF PAR CAPITAL 1427400

LESS: TREASARY SHARES BOUGHT (36000)

   1391400

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