Changes in Stockholders’ Equity On January 1, 2007 the Knox Company showed the following alphabetical list of stockholders’ equity balances:
|
Additional paid in capital on common stock |
$130,000 |
|
Additional paid in capital on preferred stock |
6,000 |
|
Common stock, $10 par |
100,000 |
|
Preferred stock, $100 par |
50,000 |
|
Retained earnings |
224,000 |
During 2007, the following events occurred and were properly recorded by the company:
1. The company purchased an investment in available for sale securities. At year end the market value of the securities had increased by $9,000.
2. The company issued 2,000 shares of common stock for $25 per share.
3. The company issued 110 shares of preferred stock for $116 per share.
4. The company reaccquired 400 shares of its common stock as treasury stock at a cost of $26 per share. (Hint: Record the reacquisition cost in a Treasury Stock account.)
5. The company earned net income of $57,000.
6. The company paid a $7 per share dividend on the preferred stock and a $1.25 per share dividend on the common stock outstanding at the end of 2007 (treasury stock is not entitled to dividends).
Required
Prepare a statement of changes in stockholders’ equity for 2007. (Include retained earnings.)