Shown below is the stockholders’ equity section of Powell’s balance sheet at December 31, 2009: Stockholders’ equity: Common stock, $2 par value, 500,000 shares authorized, ?? shares issued……………………………………………………$500,000 Additional paid-in capital common stock…………………………$1,750,000 Total paid in capital…………………………………………………$2,250,000 Retained earnings………………………………………………….2,400,000 Total stockholders’ equity………………………………………….$4650,000 In 2010, the following events occurred: Powell issued 2,500 shares of $2 par common stock as payment for legal services. Although Powell’s stock is not traded on any exchange, the agreed-upon value of the legal services is $80,000. Powell issued 4,500 shares of 6% cumulative preferred stock, $100 par value, for $106 per share. The board of directors declared a dividend of $1.25 per share on the common stock. Powell’s net income for 2007 was $675,000. Instructions Complete in good form the stockholders’ equity section of a balance sheet prepared for Powell at December 31, 2010 Stockholders’ equity: 6% cumulative preferred stock, $100 par value, 10,000 shares authorized, 4,500 shares issued Total paid‑in capital Total stockholders’ equity

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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Question

Shown below is the stockholders’ equity section of Powell’s balance sheet at December 31, 2009:

Stockholders’ equity:

Common stock, $2 par value, 500,000 shares authorized,

?? shares issued……………………………………………………$500,000

Additional paid-in capital common stock…………………………$1,750,000

Total paid in capital…………………………………………………$2,250,000

Retained earnings………………………………………………….2,400,000

Total stockholders’ equity………………………………………….$4650,000

In 2010, the following events occurred:

Powell issued 2,500 shares of $2 par common stock as payment for legal services. Although Powell’s stock is not traded on any exchange, the agreed-upon value of the legal services is $80,000.

Powell issued 4,500 shares of 6% cumulative preferred stock, $100 par value, for $106 per share.

The board of directors declared a dividend of $1.25 per share on the common stock. Powell’s net income for 2007 was $675,000.

Instructions

Complete in good form the stockholders’ equity section of a balance sheet prepared for Powell at December 31, 2010

Stockholders’ equity: 6% cumulative preferred stock, $100 par value, 10,000 shares authorized, 4,500 shares issued
Total paid‑in capital
Total stockholders’ equity

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