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FINISHING TOUCHES Balance Sheet (Stockholders' Equity Section) December 31, 2021 Stockholders' equity: Total paid-in capital Total stockholders' equity

FINISHING TOUCHES Balance Sheet (Stockholders' Equity Section) December 31, 2021 Stockholders' equity: Total paid-in capital Total stockholders' equity

FINANCIAL ACCOUNTING
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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Finishing Touches has two classes of stock authorized: 8%, $10 par preferred, and $1 par value common. The following transactions affect stockholders' equity during 2021, its first year of operations: - **January 2:** Issues 100,000 shares of common stock for $31 per share. - **February 6:** Issues 2,600 shares of 8% preferred stock for $12 per share. - **September 10:** Purchases 10,000 shares of its own common stock for $36 per share. - **December 15:** Resells 5,000 shares of treasury stock at $41 per share. In its first year of operations, Finishing Touches has net income of $156,000 and pays dividends at the end of the year of $95,000 ($1 per share) on all common shares outstanding and $2,080 on all preferred shares outstanding. **Required:** Prepare the stockholders' equity section of the balance sheet for Finishing Touches as of December 31, 2021. (*Amounts to be deducted should be indicated by a minus sign.*) **Diagram Explanation:** The diagram is a table titled "FINISHING TOUCHES Balance Sheet (Stockholders’ Equity Section) December 31, 2021." It is structured as follows: - **Rows:** - Blank row for headings - Different equity components for entry - Total paid-in capital - Blank rows for other indicators - Total stockholders’ equity - **Columns:** - Left column for descriptions - Right column for monetary values with placeholders for data This table format is intended for tabulating the specific equity values resulting from the 2021 transactions and any further calculations, demonstrating the company’s financial position concerning stockholders’ equity.
Transcribed Image Text:Finishing Touches has two classes of stock authorized: 8%, $10 par preferred, and $1 par value common. The following transactions affect stockholders' equity during 2021, its first year of operations: - **January 2:** Issues 100,000 shares of common stock for $31 per share. - **February 6:** Issues 2,600 shares of 8% preferred stock for $12 per share. - **September 10:** Purchases 10,000 shares of its own common stock for $36 per share. - **December 15:** Resells 5,000 shares of treasury stock at $41 per share. In its first year of operations, Finishing Touches has net income of $156,000 and pays dividends at the end of the year of $95,000 ($1 per share) on all common shares outstanding and $2,080 on all preferred shares outstanding. **Required:** Prepare the stockholders' equity section of the balance sheet for Finishing Touches as of December 31, 2021. (*Amounts to be deducted should be indicated by a minus sign.*) **Diagram Explanation:** The diagram is a table titled "FINISHING TOUCHES Balance Sheet (Stockholders’ Equity Section) December 31, 2021." It is structured as follows: - **Rows:** - Blank row for headings - Different equity components for entry - Total paid-in capital - Blank rows for other indicators - Total stockholders’ equity - **Columns:** - Left column for descriptions - Right column for monetary values with placeholders for data This table format is intended for tabulating the specific equity values resulting from the 2021 transactions and any further calculations, demonstrating the company’s financial position concerning stockholders’ equity.
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