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

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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.
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
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Transcribed Image Text: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 1/2
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