Stockholders’ Equity Section of Balance Sheet
Specialty Auto Racing Inc. retails racing products for BMWs, Porsches, and Ferraris. The following accounts and their balances appear in the ledger of Specialty Auto Racing Inc. on July 31, the end of the current year:
| Common Stock, $10 par | $340,000 |
| Paid-In Capital from Sale of Treasury Stock-Common | 25,600 |
| Paid-In Capital in Excess of Par-Common Stock | 102,000 |
| Paid-In Capital in Excess of Par-Preferred Stock | 84,900 |
| Preferred 4% Stock, $50 par | 1,415,000 |
| Retained Earnings | 2,400,400 |
| Treasury Stock-Common | 52,800 |
Fifty thousand shares of preferred and 200,000 shares of common stock are authorized. There are 4,800 shares of common stock held as treasury stock.
Prepare the Stockholders’ Equity section of the balance sheet as of July 31, the end of the current year using Method 1 of Exhibit 8
| Specialty Auto Racing Inc | ||||
| Stockholders’ Equity | ||||
| July 31 | ||||
| Paid-In Capital: | ||||
| $fill in the blank 2 | ||||
| fill in the blank 4 | ||||
| $fill in the blank 6 | ||||
| $fill in the blank 8 | ||||
| fill in the blank 10 | ||||
| fill in the blank 12 | ||||
| fill in the blank 14 | ||||
| Total Paid-In Capital | $fill in the blank 15 | |||
| fill in the blank 17 | ||||
| fill in the blank 19 | ||||
| Total Stockholders’ Equity | $fill in the blank 20 |
Stockholders’ Equity Section of Balance Sheet
The following Stockholders’ Equity section of the balance sheet prepared as of the end of the current year contains errors.
| Stockholders’ Equity | ||
| Paid-in capital: | ||
| Preferred 2% stock, $80 par (125,000 shares authorized and issued) | $10,000,000 | |
| Excess of issue price over par | 500,000 | |
| Paid-in capital, preferred stock | $10,500,000 | |
| Retained earnings | 96,700,000 | |
| Treasury stock (75,000 shares at cost) | 1,755,000 | |
| Dividends payable | 430,000 | |
| Total paid-in capital | $109,385,000 | |
| Common stock, $20 par (1,000,000 shares authorized, 825,000 shares issued) | 17,655,000 | |
| Organizing costs | 300,000 | |
| Total stockholders’ equity | $127,340,000 |
Prepare a corrected Stockholders’ Equity section.
| Stockholders’ Equity | ||
| Paid-In Capital: | ||
| $fill in the blank 2 | ||
| fill in the blank 4 | ||
| $fill in the blank 6 | ||
| $fill in the blank 8 | ||
| fill in the blank 10 | ||
| fill in the blank 12 | ||
| Total paid in capital | $fill in the blank 13 | |
| fill in the blank 15 | ||
| Total | $fill in the blank 16 | |
| fill in the blank 18 | ||
| Total stockholders’ equity | $fill in the blank 19 |
Stockholders’ Equity Section of Balance Sheet
Specialty Auto Racing Inc. retails racing products for BMWs, Porsches, and Ferraris. The following accounts and their balances appear in the ledger of Specialty Auto Racing Inc. on July 31, the end of the current year:
| Common Stock, $10 par | $320,000 |
| Paid-In Capital from Sale of Treasury Stock-Common | 24,100 |
| Paid-In Capital in Excess of Par-Common Stock | 96,000 |
| Paid-In Capital in Excess of Par-Preferred Stock | 89,100 |
| Preferred 4% Stock, $50 par | 1,485,000 |
| Retained Earnings | 2,457,300 |
| Treasury Stock-Common | 55,000 |
Fifty thousand shares of preferred and 200,000 shares of common stock are authorized. There are 5,000 shares of common stock held as treasury stock.
Prepare the Stockholders’ Equity section of the balance sheet as of July 31, the end of the current year using Method 1 of Exhibit 8
| Paid in Capital: | ||||
| $fill in the blank 2 | ||||
| fill in the blank 4 | ||||
| Treasury Stock (5,000 Shares at Cost) | $fill in the blank 6 | |||
| $fill in the blank 8 | ||||
| fill in the blank 10 | ||||
| fill in the blank 12 | ||||
| fill in the blank 14 | ||||
| Total Paid-In Capital | $fill in the blank 15 | |||
| fill in the blank 17 | ||||
| fill in the blank 19 | ||||
| Total Stockholders’ Equity | $fill in the blank 20 |
ABC Industries reported the following stockholders’ equity section of its balance sheet at December 31, 2005.
December 31, 2005 2004
Stockholders’ equity
8.5% cumulative preferred stock, $25 par value $ 450,000 $ 375,000
Common stock, $5 par value 680,000 575,000
Paid-in capital in excess of par value, common 4,050,000 2,500,000
Retained earnings 9,400,300 7,300,800
Treasury stock (1,970,050) (1,510,000)
Total stockholders’ equity $12,610,250 $9,240,800
The company has paid cash dividends annually for 24 years. There are no dividends in arrears. The date of declaration is always March 1 and the amount of dividends declared is always 25% of prior year net income. Year 2004 net income was $2.0 million. At year-end 2005, the average cost of treasury stock was $31 per share. At year-end 2004, the average price of treasury stock was $25.
Calculate or determine
A. How many preferred shares have been issued as of the end of 2005 and 2004?
B. How many common shares have been issued as of the end of 2005? As of year-end
2004?
C. How many treasury shares are there at year-end 2005 and at year-end 2004?
D. How many common shares are outstanding at year-end 2005 and at year-end
2004?
E. As of year-end 2005, what was the average price (at original issuance) of common
stock?
F. What was the average selling price of the common shares issued during 2005?
G. What was net income for 2005?
H. What was the amount of the dividend per share paid to preferred stock during
2005?
I. What was the amount of the dividend per share paid to common stock during 2005?
(Assume there were 40,750 common shares outstanding at the date of the 2005
dividend distribution.)
J. What is the dividend per share that is scheduled to be paid to common stock in
2006? (Assume there will be no change in the number of shares outstanding
between December 31, 2005 and the distribution of dividends in 2006.)
Prepare the stockholders’ equity section of the balance sheet.
St. Louis Corporation has the following account balances at December 31:
Common Stock, $10 par, 5,000 shares issued $50,000
Paid-in Capital in Excess of Par Value $10,000
Retained Earnings $29,000
Treasury Stock-Common, 500 shares, $7,000.
The corporate charter authorizes the issuance if 108,000 shares of preferred stock at $ 50 par, and 1,920,000 shares of $4 par common stock. At the end of the current year, the titles and balances of the stockholders’ equity accounts are as follows:
Common Stock $3840000
Paid-in capital excess of par-common stock 4800000
common stock dividends distributable 102000
preferred stock 996000
paid-in capital in excess of Par-preferred stock 744000
retained earnings 4500000
treasury common stock (26,000 shares at cost) 124800
Required
Prepare the stockholders’ equity section of the balance sheet for the San Jose Co. as of December 31, 2010. Use good form. (be sure to calculate and disclose the number of shares authorized, issued, and outstanding. Also include a proper heading.)
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