%24%24Finishing Touches has two classes of stock authorized: 8%, $10 par preferred, and $1 par value common. The following transactionsaffect stockholders' equity during 2021, its first year of operations:2 Issues 100,000 shares of common stock for $28 per share.6 Issues 2,300 shares of 8% preferred stock for $12 per share.September 10 Purchases 10,000 shares of its own common stock for $33 per share.JanuaryFebruaryDecember 15 Resells 5,000 shares of treasury stock at $38 per share.In its first year of operations, Finishing Touches has net income of $153,000 and pays dividends at the end of the year of $95,000 ($1per share) on all common shares outstanding and $1,840 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 bededucted should be indicated by a minus sign.)FINISHING TOUCHESBalance Sheet(Stockholders' Equity Section)December 31, 2021Stockholders' equity:Common stock100,000Preferred stock23,000Additional paid-in capitalTotal paid-in capital123,000Retained earningsTreasury stockTotal stockholders' equity123,000 Nathan's Athletic Apparel has 1,500 shares of 6%, $100 par value preferred stock the company issued at the beginning of 2020. Allremaining shares are common stock. The company was not able to pay dividends in 2020, but plans to pay dividends of $20,000 in2021.Required:1. & 2. How much of the $20,000 dividend will be paid to preferred stockholders and how much will be paid to common stockholdersin 2021, assuming the preferred stock is cumulative? What if the preferred stock were noncumulative?CumulativeNonCumulativePreferred dividends in arrears for 2020Preferred dividends for 2021Remaining dividends to common stockholdersTotal dividends0 $%24

The dividend is declared from the retained earnings of the business. The shareholders' equity…

puches has two classes of stock authorized: 8%, $10 par preferred, and $1 par value common. Th holders' equity during 2021, its first year of operations: 2 Issues 100,000 shares of common stock for $28 per share. 6 Issues 2,300 shares of 8% preferred stock for $12 per share. L0 Purchases 10,000 shares of its own common stock for $33 per share. 5 Resells 5,000 shares of treasury stock at $38 per share. ear of operations, Finishing Touches has net income of $153,000 and pays dividends at the end of on all common shares outstanding and $1,840 on all preferred shares outstanding.

puches has two classes of stock authorized: 8%, $10 par preferred, and $1 par value common. Th holders' equity during 2021, its first year of operations: 2 Issues 100,000 shares of common stock for $28 per share. 6 Issues 2,300 shares of 8% preferred stock for $12 per share. L0 Purchases 10,000 shares of its own common stock for $33 per share. 5 Resells 5,000 shares of treasury stock at $38 per share. ear of operations, Finishing Touches has net income of $153,000 and pays dividends at the end of on all common shares outstanding and $1,840 on all preferred shares outstanding.

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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