At the end of 2011, Stanley Utilities Inc. had the following equity accounts and balances: Common stock,

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At the end of 2011, Stanley Utilities Inc. had the following equity accounts and balances:
Common stock, $1 par ...........$4,500,000
Additional paid-in capital—common stock ...1,375,000
Retained earnings .............188,000
During 2012, Stanley Utilities engaged in the following transactions involving its equity accounts:
a. Sold 3,300 shares of common stock for $15 per share.
b. Sold 1,000 shares of 12 percent, $100 par preferred stock at $105 per share.
c. Declared and paid cash dividends of $8,000.
d. Repurchased 1,000 shares of treasury stock (common) for $38 per share.
e. Sold 400 of the treasury shares for $42 per share.

Required:
1. Prepare the journal entries for a through e.
2. Assume that 2012 net income was $87,000. Prepare a statement of stockholders’ equity at December 31, 2012.
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
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Cornerstones of Financial and Managerial Accounting

ISBN: 978-1111879044

2nd edition

Authors: Rich, Jeff Jones, Dan Heitger, Maryanne Mowen, Don Hansen

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