Finishing Touches has two classes of stock authorized: 7%, $10 par preferred, and $1 par value common. The following transactions affect stockholders' equity during 2018, its first year of operations: January 2 Issues 100,000 shares of common stock for $15 per share. February 6 Issues 1,000 shares of 7% preferred stock for $13 per share. September 10 Purchases 12,000 shares of its own common stock for $20 per share. December 15 Reissues 6,000 shares of treasury stock at $25 per share. In its first year of operations, Finishing Touches has net income of $140,000 and pays dividends at the end of the year of $94,000 ($1 per share) on all common shares outstanding and $700 on all preferred shares outstanding. Required: Prepare the stockholders' equity section of the balance sheet for Finishing Touches as of December 31, 2018. (Amounts to be deducted should be indicated by a minus sign.)
Finishing Touches has two classes of stock authorized: 7%, $10 par preferred, and $1 par value common. The following transactions affect stockholders' equity during 2018, its first year of operations: January 2 Issues 100,000 shares of common stock for $15 per share. February 6 Issues 1,000 shares of 7% preferred stock for $13 per share. September 10 Purchases 12,000 shares of its own common stock for $20 per share. December 15 Reissues 6,000 shares of treasury stock at $25 per share. In its first year of operations, Finishing Touches has net income of $140,000 and pays dividends at the end of the year of $94,000 ($1 per share) on all common shares outstanding and $700 on all preferred shares outstanding. Required: Prepare the stockholders' equity section of the balance sheet for Finishing Touches as of December 31, 2018. (Amounts to be deducted should be indicated by a minus sign.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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
Transcribed Image Text:FINISHING TOUCHES
Balance Sheet
(Stockholders' Equity Section)
December 31, 2018
Stockholders' equity:
Common stock
Preferred stock
Additional paid-in capital
$
100,000
Total paid-in capital
100,000
Treasury stock
(150,000)|
Retained earnings
Total stockholders' equity
$
(50,000)
24

Transcribed Image Text:Finishing Touches has two classes of stock authorized: 7%, $10 par preferred, and $1 par value common. The following transactions
affect stockholders' equity during 2018, its first year of operations:
January 2 Issues 100,000 shares of common stock for $15 per share.
February 6 Issues 1,000 shares of 7% preferred stock for $13 per share.
September 10 Purchases 12,000 shares of its own common stock for $20 per share.
December 15 Reissues 6,000 shares of treasury stock at $25 per share.
In its first year of operations, Finishing Touches has net income of $140,000 and pays dividends at the end of the year of $94,000 ($1
per share) on all common shares outstanding and $700 on all preferred shares outstanding.
Required:
Prepare the stockholders' equity section of the balance sheet for Finishing Touches as of December 31, 2018. (Amounts to be
deducted should be indicated by a minus sign.)
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