Hatch Company has two classes of capital stock outstanding: 8%, $20 par preferred and $5 par common. At December 31, 2020, the following accounts were included in stockholders’ equity.Preferred Stock, 150,000 shares$ 3,000,000Common Stock, 2,000,000 shares10,000,000Paid-in Capital in Excess of Par—Preferred Stock200,000Paid-in Capital in Excess of Par—Common Stock27,000,000Retained Earnings4,500,000The following transactions affected stockholders’ equity during 2021.Jan.100030,000 shares of preferred stock issued at $22 per share.Feb.150,000 shares of common stock issued at $20 per share.June12-for-1 stock split (par value reduced to $2.50).July130,000 shares of common treasury stock purchased at $10 per share. Hatch uses the cost method.Sept.1510,000 shares of treasury stock reissued at $11 per share.Dec.31The preferred dividend is declared, and a common dividend of 50¢ per share is declared.Dec.31Net income is $2,100,000.InstructionsPrepare the stockholders’ equity section for Hatch Company at December 31, 2021. Show all supporting computations.

Following is stockholder’s equity section:

Answered: Hatch Company has two classes of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Concept explainers

Question

100%

Hatch Company has two classes of capital stock outstanding: 8%, $20 par preferred and $5 par common. At December 31, 2020, 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 2021.

Jan.	1	000	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.

Instructions

Prepare the stockholders’ equity section for Hatch Company at December 31, 2021. Show all supporting computations.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 4 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions