Chapter 10, Problem 10.77AP

(Learning Objective 6: Report stockholders’ equity) Lima Corp. has the following stockholders’ equity information: Lima’s charter authorizes the company to issue 4,000 shares of 11% preferred stock with par value of $200 and 700,000 shares of no-par common stock. The company issued 1,000 shares of the preferred stock at $200 per share. It issued 350,000 shares of the common stock for a total of $512,000. The company’s retained earnings balance at the beginning of 2018 was $75,000, and net income for the year was $100,000. During 2018, Lima declared the specified dividend on preferred and a $0.10 per-share dividend on common. Preferred dividends for 2017 were in arrears.

Requirement

1. Prepare the stockholders’ equity section of Lima Corp.’s balance sheet at December 31, 2018. Show the computation of all amounts. Journal entries are not required.