Shareholders' EquityHerrera Manufacturing Corporation completed the following transactions during its first year of operation, 2016:The state authorized the issuance of 30,000 shares of $5 par common stock; 15,000 shares were issued at $22 per share.The state authorized the issuance of 6,000 shares of $50 par preferred stock. All 6,000 shares were issued at $70 per share.Herrera reacquired 1,000 shares of its outstanding common stock at $18 per share. The cost method is used to account for treasury stock.Herrera invested $50,000 of excess cash, not needed to finance operations, in long-term available-for-sale equity securities. At year-end, the market value of these securities was $47,500.Herrera sold 500 shares of treasury stock for $23 per share.Net income for the first year of operations was $16,000. No dividends were declared.Required:Prepare the shareholders' equity section of Herrera's balance sheet as of December 31, 2016. 1/17/2021CengageNOWv21 Online teaching and learning resource from Cengage LearningShareholders' EquityHerrera Manufacturing Corporation completed the following transactions during its first year of operation, 2016:1. The state authorized the issuance of 30,000 shares of $5 par common stock; 15,000 shares were issued at $22 pershare.2. The state authorized the issuance of 6,000 shares of $50 par preferred stock. All 6,000 shares were issued at $70per share.3. Herrera reacquired 1,000 shares of its outstanding common stock at $18 per share. The cost method is used toaccount for treasury stock.4. Herrera invested $50,000 of excess cash, not needed to finance operations, in long-term available-for-sale equitysecurities. At year-end, the market value of these securities was $47,500.5. Herrera sold 500 shares of treasury stock for $23 per share.6. Net income for the first year of operations was $16,000. No dividends were declared.Required:Prepare the shareholders' equity section of Herrera's balance sheet as of December 31, 2016.HERRARA MANUFACTURING CORPORATIONShareholders' Equity SectionDecember 31, 2016Contributed Capital:$Additional paid-in capital:$Total contributed capitalAccumulated other comprehensive income (loss):Total contributed capital, retained earnings,$and accumulated other comprehensive income$Total Shareholders' Equityhttps://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false1/2

The shareholders' equity section comprises of the issued shares (Common and preference), and excess…

Answered: Shareholders' Equity Herrera…

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter8: Liabilities And Stockholders' Equity

Section: Chapter Questions

Problem 8.23E

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Shareholders' Equity

Herrera Manufacturing Corporation completed the following transactions during its first year of operation, 2016:

The state authorized the issuance of 30,000 shares of $5 par common stock; 15,000 shares were issued at $22 per share.
The state authorized the issuance of 6,000 shares of $50 par preferred stock. All 6,000 shares were issued at $70 per share.
Herrera reacquired 1,000 shares of its outstanding common stock at $18 per share. The cost method is used to account for treasury stock.
Herrera invested $50,000 of excess cash, not needed to finance operations, in long-term available-for-sale equity securities. At year-end, the market value of these securities was $47,500.
Herrera sold 500 shares of treasury stock for $23 per share.
Net income for the first year of operations was $16,000. No dividends were declared.

Required:

Prepare the shareholders' equity section of Herrera's balance sheet as of December 31, 2016.

1/17/2021
CengageNOWv21 Online teaching and learning resource from Cengage Learning
Shareholders' Equity
Herrera Manufacturing Corporation completed the following transactions during its first year of operation, 2016:
1. The state authorized the issuance of 30,000 shares of $5 par common stock; 15,000 shares were issued at $22 per
share.
2. The state authorized the issuance of 6,000 shares of $50 par preferred stock. All 6,000 shares were issued at $70
per share.
3. Herrera reacquired 1,000 shares of its outstanding common stock at $18 per share. The cost method is used to
account for treasury stock.
4. Herrera invested $50,000 of excess cash, not needed to finance operations, in long-term available-for-sale equity
securities. At year-end, the market value of these securities was $47,500.
5. Herrera sold 500 shares of treasury stock for $23 per share.
6. Net income for the first year of operations was $16,000. No dividends were declared.
Required:
Prepare the shareholders' equity section of Herrera's balance sheet as of December 31, 2016.
HERRARA MANUFACTURING CORPORATION
Shareholders' Equity Section
December 31, 2016
Contributed Capital:
$
Additional paid-in capital:
$
Total contributed capital
Accumulated other comprehensive income (loss):
Total contributed capital, retained earnings,
$
and accumulated other comprehensive income
$
Total Shareholders' Equity
https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false
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