Flounder Company has two classes of capital stock outstanding: 7%, $100 par preferred and $2 par common. At December 31, 2017, the following accounts were included in stockholders’ equity.Preferred Stock, 50,000 shares $5,000,000Common stock, 1,200,000 shares 2,400,000Paid-in Capital in Excess of Par – Preferred Stock 300,000Paid-in Capital in Excess of Par – Common Stock 31,200,000Retained Earnings 12,800,000The following transactions affected stockholders’ equity during 2018.Jan. 1-500 shares of preferred stock issued at $108 per share.Mar. 21-101,000 shares of common stock issued at $40 per share.June 1-2-for-1 common stock split (par value reduced to $1).July 15-77,000 shares of common treasury stock purchased at $28 per share. Flounder uses the cost method.Sept. 4-9,000 shares of treasury stock reissued at $34 per share.Dec. 31-The preferred dividend is declared, and a common dividend of 73¢ per share is declared.Dec. 31-Net income is $4,352,000.Prepare the stockholders’ equity section for Hatch Company at December 31, 2018.

Stockholders equity is generally described as the wealth remaining after paying all the liabilities.…

Answered: Preferred Stock, 50,000 shares…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Flounder Company has two classes of capital stock outstanding: 7%, $100 par preferred and $2 par common. At December 31, 2017, the following accounts were included in stockholders’ equity.

Preferred Stock, 50,000 shares		$5,000,000
Common stock, 1,200,000 shares		2,400,000
Paid-in Capital in Excess of Par – Preferred Stock		300,000
Paid-in Capital in Excess of Par – Common Stock		31,200,000
Retained Earnings		12,800,000

The following transactions affected stockholders’ equity during 2018.

Jan. 1	-	500 shares of preferred stock issued at $108 per share.
Mar. 21	-	101,000 shares of common stock issued at $40 per share.
June 1	-	2-for-1 common stock split (par value reduced to $1).
July 15	-	77,000 shares of common treasury stock purchased at $28 per share. Flounder uses the cost method.
Sept. 4	-	9,000 shares of treasury stock reissued at $34 per share.
Dec. 31	-	The preferred dividend is declared, and a common dividend of 73¢ per share is declared.
Dec. 31	-	Net income is $4,352,000.

Prepare the stockholders’ equity section for Hatch Company at December 31, 2018.

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