Chapter 13, Problem 13E

In Draco Corporation’s first year of business, the following transactions affected its equity accounts. Prepare the stockholders’ equity section of Draco’s balance sheet as of December 31.

• Issued 4,000 shares of $2 par value common stock for $18. It authorized 20,000 shares.
• Issued 1,000 shares of 12%, $10 par value preferred stock for $23. It authorized 3,000 shares.
• Reacquired 200 shares of common stock for $30 each.
• Retained earnings is impacted by reported net income of $50,000 and cash dividends of $15,000.