Chapter 12, Problem 3R

Chen Corporation began 2012 with the following stockholders’ equity balances:

The following selected transactions and events occurred during the year:

a. Issued 10,000 shares of common stock for $60,000.

b. Purchased 1,200 shares of treasury stock for $4,800.

c. Sold 2,000 shares of treasury stock for $11,000.

d. Generated net income of $94,000.

e. Declared and paid the full year’s dividend on preferred stock and a dividend of $1.00 per share on common stock outstanding at the end of the year.

Chen Corporation maintains several paid-in capital accounts (Paid-in Capital in Excess of Par, Paid-in Capital from Treasury Stock, etc.) in its ledger, but combines them all as “Additional paid-in capital” when preparing financial statements.

In the space provided below, prepare the stockholders’ equity section of Chen Corporation’s balance sheet as of December 31, 2012. Use proper headings and provide full disclosure of all appropriate information. Chen’s corporate charter authorizes the issuance of 1,000 shares of preferred stock and 100,000 shares of common stock.