Specialty Auto Racing Inc. retails racing products for BMWs, Porsches, and Ferraris. The following accounts and their balances appear in the ledger of Specialty Auto Racing Inc. on July 31, the end of the current year: 1 Common Stock, $32 par $8,880,000.00 2 Paid-In Capital from Sale of Treasury Stock-Common 348,000.00 3 Paid-In Capital in Excess of Par-Common Stock 2,497,500.00 4 Paid-In Capital in Excess of Par-Preferred Stock 489,000.00 5 Preferred 1% Stock, $150 par 7,335,000.00 6 Retained Earnings 72,425,500.00 7 Treasury Stock-Common 1,044,900.00 Fifty thousand shares of preferred and 300,000 shares of common stock are authorized. There are 24,300 shares of common stock held as treasury stock. Prepare the Stockholders’ Equity section of the balance sheet as of July 31, the end of the current year using Method 1 ofExhibit 8. Refer to the lists of Accounts and Amount Descriptions provided for the exact wording of the answer choices for text entries. Accounts and Amount Descriptions Common stock, $32 par (300,000 shares authorized, 277,500 shares issued) Common stock dividends Excess over par From sale of treasury stock Increase in retained earnings Preferred 1% stock, $150 par (50,000 shares authorized, 48,900 shares issued) Paid-in capital, common stock Paid-in capital, preferred stock Preferred stock dividends Retained earnings Total Total paid-in capital Total stockholders’ equity Treasury stock

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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Specialty Auto Racing Inc. retails racing products for BMWs, Porsches, and Ferraris. The following accounts and their balances appear in the ledger of Specialty Auto Racing Inc. on July 31, the end of the current year:

1	Common Stock, $32 par	$8,880,000.00
2	Paid-In Capital from Sale of Treasury Stock-Common	348,000.00
3	Paid-In Capital in Excess of Par-Common Stock	2,497,500.00
4	Paid-In Capital in Excess of Par-Preferred Stock	489,000.00
5	Preferred 1% Stock, $150 par	7,335,000.00
6	Retained Earnings	72,425,500.00
7	Treasury Stock-Common	1,044,900.00

Fifty thousand shares of preferred and 300,000 shares of common stock are authorized. There are 24,300 shares of common stock held as treasury stock.

Prepare the Stockholders’ Equity section of the balance sheet as of July 31, the end of the current year using Method 1 ofExhibit 8. Refer to the lists of Accounts and Amount Descriptions provided for the exact wording of the answer choices for text entries.

Accounts and Amount Descriptions
Common stock, $32 par (300,000 shares authorized, 277,500 shares issued)
Common stock dividends
Excess over par
From sale of treasury stock
Increase in retained earnings
Preferred 1% stock, $150 par (50,000 shares authorized, 48,900 shares issued)
Paid-in capital, common stock
Paid-in capital, preferred stock
Preferred stock dividends
Retained earnings
Total
Total paid-in capital
Total stockholders’ equity
Treasury stock

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Total Shareholders' Equity section of the balance sheet includes all the outstanding share capital less treasury stock, add retained earnings and adding paid-in capital in excess of par capital.

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