(Equity Transactions and Statement Preparation) Hatch Company has two classes of capital stock outstanding: 8%, $20 par preferred and $5 par common. At December 31, 2017, the following accounts were included in stockholders’ equity. Preferred Stock, 150,000 shares $ 3,000,000 Common Stock, 2,000,000 shares 10,000,000 Paid-in Capital in Excess of Par—Preferred Stock 200,000 Paid-in Capital in Excess of Par—Common Stock 27,000,000 Retained Earnings 4,500,000 The following transactions affected stockholders’ equity during 2018.Jan. 1 30,000 shares of preferred stock issued at $22 per share.Feb. 1 50,000 shares of common stock issued at $20 per share.June 1 2-for-1 stock split (par value reduced to $2.50).July 1 30,000 shares of common treasury stock purchased at $10 per share. Hatch uses the cost method.Sept. 15 10,000 shares of treasury stock reissued at $11 per share.Dec. 31 The preferred dividend is declared, and a common dividend of 50¢ per share is declared.Dec. 31 Net income is $2,100,000.InstructionsPrepare the stockholders’ equity section for Hatch Company at December 31, 2018. Show all supporting computations.
(Equity Transactions and Statement Preparation) Hatch Company has two classes of capital stock outstanding: 8%, $20 par preferred and $5 par common. At December 31, 2017, the following accounts were included in stockholders’ equity. Preferred Stock, 150,000 shares $ 3,000,000 Common Stock, 2,000,000 shares 10,000,000 Paid-in Capital in Excess of Par—Preferred Stock 200,000 Paid-in Capital in Excess of Par—Common Stock 27,000,000 Retained Earnings 4,500,000 The following transactions affected stockholders’ equity during 2018.Jan. 1 30,000 shares of preferred stock issued at $22 per share.Feb. 1 50,000 shares of common stock issued at $20 per share.June 1 2-for-1 stock split (par value reduced to $2.50).July 1 30,000 shares of common treasury stock purchased at $10 per share. Hatch uses the cost method.Sept. 15 10,000 shares of treasury stock reissued at $11 per share.Dec. 31 The preferred dividend is declared, and a common dividend of 50¢ per share is declared.Dec. 31 Net income is $2,100,000.InstructionsPrepare the stockholders’ equity section for Hatch Company at December 31, 2018. Show all supporting computations.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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(Equity Transactions and Statement Preparation) Hatch Company has two classes of capital stock outstanding: 8%, $20 par preferred and $5 par common. At December 31, 2017, the following accounts were included in
| $ 3,000,000 | |
| Common Stock, 2,000,000 shares | 10,000,000 |
| Paid-in Capital in Excess of Par—Preferred Stock | 200,000 |
| Paid-in Capital in Excess of Par—Common Stock | 27,000,000 |
| 4,500,000 |
The following transactions affected stockholders’ equity during 2018.
Jan. 1 30,000 shares of preferred stock issued at $22 per share.
Feb. 1 50,000 shares of common stock issued at $20 per share.
June 1 2-for-1 stock split (par value reduced to $2.50).
July 1 30,000 shares of common
Sept. 15 10,000 shares of treasury stock reissued at $11 per share.
Dec. 31 The preferred dividend is declared, and a common dividend of 50¢ per share is declared.
Dec. 31 Net income is $2,100,000.
Instructions
Prepare the stockholders’ equity section for Hatch Company at December 31, 2018. Show all supporting computations.
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