Comprehensive Analysis and Reporting of Stockholders’ Equity
Egbert Company has two classes of capital stock outstanding: 10%,$20 par preferred and $1 par common. During the fiscal year ended November 30, 2008, the company was active in transactions affecting the stockholders’ equity. The following summarizes these transactions:
|
|
Number of |
Price per |
|
Type of Transaction |
Shares |
Share |
|
(a) Issue of preferred stock |
8,000 |
$26 |
|
(b) Issue of common stock |
25,000 |
65 |
|
(c) Reacquisition and retirement of preferred stock |
4,000 |
29 |
|
(d) Purchase of treasury stock—common (reported at cost) |
10,000 |
70 |
|
(e) Stock split—common (par value reduced to $050) |
2 for 1 |
|
|
(f) Reissuance of treasury stock—common (after stock split) |
10,000 |
55 |
Balances of the accounts in the Stockholders’ Equity section of the November 30, 2007, balance sheet were
|
Preferred stock, 60,000 shares |
$ 1,200,000 |
|
Common stock, 200,000 shares |
200,000 |
|
Paid in capital in excess of par—preferred |
300,000 |
|
Paid in capital in excess of par—common |
12,600,000 |
|
Retained earnings |
780,000 |
Dividends were paid at the end of the fiscal year on the common stock at $1.10 per share and on the preferred stock at the preferred rate. Net income for the year was $700,000.
Instructions: Based on the preceding data, prepare the Stockholders’ Equity section of the balance sheet as of November 30, 2008. (Note: A work sheet beginning with November 30, 2007, balances showing transactions for the current year will facilitate the preparation of this section of the balance sheet.)