On January 1, 2017, Skysong, Inc. had these stockholders\' equity balances. Comm
ID: 341480 • Letter: O
Question
On January 1, 2017, Skysong, Inc. had these stockholders' equity balances. Common Stock, $1 par (2,000,000 shares authorized, 620,000 shares issued and outstanding) Paid-in Capital in Excess of Par Value Retained Earnings Accumulated Other Comprehensive Income $620,000 1,440,000 710,000 58,000 During 2017, the following transactions and events occurred. 1. 2. 3. 4. 5. 6. Issued 45,000 shares of $1 par value common stock for $5 per share. Issued 55,500 shares of common stock for cash at $4 per share. Purchased 14,000 shares of common stock for the treasury at $3.60 per share. Declared and paid a cash dividend of $211,000. Earned net income of $391,000. Had other comprehensive income of $17,000. Prepare the stockholders' equity section of the balance sheet at December 31, 2017.Explanation / Answer
SKYSONG , INC. STOCKHOLDER'S EQUITY SECTION AMOUNT Common Stock(720,000 Shares of $ 1) $ 7,20,000 Paid in capital in Excess of par value $ 17,85,000 Retained Earning $ 8,90,000 Accumulated Other Comprehensive income $ 75,000 Less: Treasury Stock $ -50,400 (14,000 Shares X $ 3.60 Per shares) Total $ 34,19,600 CALCULATION OF THE CLOSING COMMON STOCK Par Value Excess of par Value Openinng Common stock $ 6,20,000 $ 14,40,000 Add: Issued 45,000 Shares @ $ 5 $ 45,000 $ 1,80,000 (45,000 shares X 1) (45,000 shares X 4) Issued 55,000 Shares @ $ 4 $ 55,000 $ 1,65,000 (45,000 shares X 1) (45,000 shares X 4) Total $ 7,20,000 $ 17,85,000 CALCULATION OF THE CLOSING RETAINED EARNING & COMPRESHENSIVE INCOME RETAINED EARNING COMPREHENSIVE INCOME Opening Balance 710000 58000 Add: Net income of the year 391000 0 Add: Other comprehensive income 0 17000 Less: Declared and paid cash dividends -211000 890000 75000
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