Wilco Corporation has the following account balances at December 31, 2017.
Common stock, $5 par value $ 510,000
Treasury stock 90,000
Retained earnings 2,340,000
Paid-in capital in excess of par—common stock 1,320,000
Prepare Wilco’s December 31, 2017, stockholders’ equity section.
The total stockholders’ equity of Wilco on December 31, 2017, is $4,080,000.
In simple words, company net worth (or shareholders' equity) measures the amount of money that the owners of the company invested into the business.
December 31, 2017
Common stock, $5 par value
Paid-in capital in excess
of par-common stock
Total paid-in capital
Less: Treasury stock
Total stockholders’ equity
(Stockholders’ Equity Section) Bruno Corporation’s post-closing trial balance at December 31, 2017, is shown as follows.
POST-CLOSING TRIAL BALANCE
DECEMBER 31, 2017
Additional paid-in capital in excess
From treasury stock
Allowance for doubtful accounts
Common stock ($1 par)
Dividends payable (preferred stock—cash)
Preferred stock ($50 par)
Treasury stock (common at cost)
At December 31, 2017, Bruno had the following number of common and preferred shares.
The dividends on preferred stock are $4 cumulative. In addition, the preferred stock has a preference in liquidation of $50 per share.
Prepare the stockholders’ equity section of Bruno’s balance sheet at December 31, 2017.
Hatch Company has two classes of capital stock outstanding: 8%, $20 par preferred and $5 par common. At December 31, 2017, the following accounts were included in stockholders’ equity.
Preferred Stock, 150,000 shares $ 3,000,000
Common Stock, 2,000,000 shares 10,000,000
Paid-in Capital in Excess of Par—Preferred Stock 200,000
Paid-in Capital in Excess of Par—Common Stock 27,000,000
Retained Earnings 4,500,000
The following transactions affected stockholders’ equity during 2018.
Jan.1 30,000 shares of preferred stock issued at $22 per share.
Feb.1 50,000 shares of common stock issued at $20 per share.
June 1 2-for-1 stock split (par value reduced to $2.50).
July 1 30,000 shares of common treasury stock purchased at $10 per
share. Hatch uses the cost method.
Sept.15 10,000 shares of treasury stock reissued at $11 per share.
Dec.31 The preferred dividend is declared, and a common dividend of 50¢
per share is declared.
Dec. 31 Net income is $2,100,000.
Prepare the stockholders’ equity section for Hatch Company at December 31, 2018. Show all supporting computations.
(Stock Dividends) Kulikowski Inc., a client, is considering the authorization of a 10% common stock dividend to common stockholders. The financial vice president of Kulikowski wishes to discuss the accounting implications of such an authorization with you before the next meeting of the board of directors.
(Preferred Stock Entries and Dividends) Otis Thorpe Corporation has 10,000 shares of $100 par value, 8%, preferred stock and 50,000 shares of $10 par value common stock outstanding at December 31, 2017.
Answer the questions in each of the following independent situations.
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