On January 1, 2007 the Knox Company showed the following alphabetical list of stockholders equity balances: Additional

Question:

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.

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.)

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... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...