Chapter 11, Problem 11.2P

Preparing the Stockholders’ Equity Section of the Balance Sheet

Witt Corporation received its charter during January of this year. The charter authorized the following stock:

Preferred stock: 10 percent. $10 par value, 21,000 shares authorized

Common stock: $8 par value, 50,000 shares authorized

During the year, the following transactions occurred in the order given:

1. a. Issued a total of 40,000 shares of the common stock at $12 cash per share.
2. b. Sold 5,500 shares of the preferred stock at $16 cash per share.
3. c. Sold 3,000 shares of the common stock at $15 cash per share and 1,000 shares of the preferred stock at $26 cash per share.
4. d. Net income for the year was $96,000.

Required:

Prepare the stockholders’ equity section of the balance sheet at the end of the year.