Power Drive Corporation designs and produces a line of golf equipment and golf apparel. Power Drive has 100,000 shares of common stock outstanding as of the beginning of 2021. Power Drive has the following transactions affecting stockholders' equity in 2021. March 1 Issues 45,000 additional shares of $1 par value common stock for $42 per share.May 10 Purchases 4,000 shares of treasury stock for $45 per share.June 1 Declares a cash dividend of $1.00 per share to all stockholders of record on June 15. (Hint: Dividends are not paid on treasury stock.)July 1 Pays the cash dividend declared on June 1.October 21 Resells 2,000 shares of treasury stock purchased on May 10 for $50 per share.Power Drive Corporation has the following beginning balances in its stockholders' equity accounts on January 1, 2021: Common Stock, $100,000; Additional Paid-in Capital, $3,500,000; and Retained Earnings, $1,000,000. Net income for the year ended December 31, 2021, is $500,000.Required:Prepare the stockholders' equity section of the balance sheet for Power Drive Corporation as of December 31, 2021.

The stockholders equity section gives the details of the share of the owners or investors.

Answered: Power Drive Corporation designs and…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Power Drive Corporation designs and produces a line of golf equipment and golf apparel. Power Drive has 100,000 shares of common stock outstanding as of the beginning of 2021. Power Drive has the following transactions affecting stockholders' equity in 2021.

March	1	Issues 45,000 additional shares of $1 par value common stock for $42 per share.
May	10	Purchases 4,000 shares of treasury stock for $45 per share.
June	1	Declares a cash dividend of $1.00 per share to all stockholders of record on June 15. (Hint: Dividends are not paid on treasury stock.)
July	1	Pays the cash dividend declared on June 1.
October	21	Resells 2,000 shares of treasury stock purchased on May 10 for $50 per share.

Power Drive Corporation has the following beginning balances in its stockholders' equity accounts on January 1, 2021: Common Stock, $100,000; Additional Paid-in Capital, $3,500,000; and Retained Earnings, $1,000,000. Net income for the year ended December 31, 2021, is $500,000.

Required:
Prepare the stockholders' equity section of the balance sheet for Power Drive Corporation as of December 31, 2021.

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