Herrera Manufacturing Corporation completed the following transactions during its first year of operation, 2019: The state authorized the issuance of 30,000 shares of $5 par common stock; 15,000 shares were issued at $22 per share. The state authorized the issuance of 6,000 shares of $50 par preferred stock. All 6,000 shares were issued at $70 per share. Herrera reacquired 1,000 shares of its outstanding common stock at $18 per share. The cost method is used to account for treasury stock. Herrera invested $50,000 of excess cash, not needed to finance operations, in long-term available-for-sale debt securities. At year-end, the market value of these securities was $47,500. Herrera sold 500 shares of treasury stock for $23 per share. Net income for the first year of operations was $16,000. No dividends were declared. Required: Prepare the shareholders' equity section of Herrera's balance sheet as of December 31, 2019.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Shareholders' Equity

Herrera Manufacturing Corporation completed the following transactions during its first year of operation, 2019:

  1. The state authorized the issuance of 30,000 shares of $5 par common stock; 15,000 shares were issued at $22 per share.
  2. The state authorized the issuance of 6,000 shares of $50 par preferred stock. All 6,000 shares were issued at $70 per share.
  3. Herrera reacquired 1,000 shares of its outstanding common stock at $18 per share. The cost method is used to account for treasury stock.
  4. Herrera invested $50,000 of excess cash, not needed to finance operations, in long-term available-for-sale debt securities. At year-end, the market value of these securities was $47,500.
  5. Herrera sold 500 shares of treasury stock for $23 per share.
  6. Net income for the first year of operations was $16,000. No dividends were declared.

Required:

Prepare the shareholders' equity section of Herrera's balance sheet as of December 31, 2019.

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