Donnie Hilfiger has two classes of stock authorized: $1 par preferred and $0.01 par value common. As of the beginning of 2024, 300 shares of preferred stock and 4,000 shares of common stock have been issued. The following transactions affect stockholders’ equity during 2024: March 1 Issue 1,100 shares of common stock for $42 per share. May 15 Purchase 400 shares of treasury stock for $35 per share. July 10 Resell 200 shares of treasury stock purchased on May 15 for $40 per share. October 15 Issue 200 shares of preferred stock for $45 per share. December 1 Declare a cash dividend on both common and preferred stock of $0.50 per share to all stockholders of record on December 15. (Hint: Dividends are not paid on treasury stock.) December 31 Pay the cash dividends declared on December 1. Donnie Hilfiger has the following beginning balances in its stockholders’ equity accounts on January 1, 2024: Preferred Stock, $300; Common Stock, $40; Additional Paid-in Capital, $76,000; and Retained Earnings, $30,500. Net income for the year ended December 31, 2024, is $10,800. Taking into consideration the beginning balances on January 1, 2024 and all the transactions during 2024, respond to the following for Donnie Hilfiger: Required: 1. Prepare the stockholders’ equity section of the balance sheet as of December 31, 2024. (Amounts to be deducted should be indicated by a minus sign.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Donnie Hilfiger has two classes of stock authorized: $1 par preferred and $0.01 par value common. As of the beginning of 2024, 300 shares of preferred stock and 4,000 shares of common stock have been issued. The following transactions affect stockholders’ equity during 2024:

March 1	Issue 1,100 shares of common stock for $42 per share.
May 15	Purchase 400 shares of treasury stock for $35 per share.
July 10	Resell 200 shares of treasury stock purchased on May 15 for $40 per share.
October 15	Issue 200 shares of preferred stock for $45 per share.
December 1	Declare a cash dividend on both common and preferred stock of $0.50 per share to all stockholders of record on December 15. (Hint: Dividends are not paid on treasury stock.)
December 31	Pay the cash dividends declared on December 1.

Donnie Hilfiger has the following beginning balances in its stockholders’ equity accounts on January 1, 2024: Preferred Stock, $300; Common Stock, $40; Additional Paid-in Capital, $76,000; and Retained Earnings, $30,500. Net income for the year ended December 31, 2024, is $10,800.

Taking into consideration the beginning balances on January 1, 2024 and all the transactions during 2024, respond to the following for Donnie Hilfiger:

Required:

1. Prepare the stockholders’ equity section of the balance sheet as of December 31, 2024. (Amounts to be deducted should be indicated by a minus sign.)

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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